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Private Mortgages
Feb 28, 2021

When Might I Need A Private Mortgage?

Being accepted for a mortgage or attempting to refinance your home is never a walk in the park. Your local bank probably doesn’t give you a free pass just because you’ve been a client for nearly 20 years or so because they don’t care. The stress of playing roulette with your bank over the future of a home can be a nightmare. If they find even the slightest of inconsistencies or potential vulnerabilities that are related with your income, perhaps even a mistake you made way back then, they won’t hesitate to stamp your contract with red ink. But not to worry, there is always an alternative, life finds a way to help those who would have been otherwise rejected receive self-employed or bad credit mortgages to finally get or keep that dream home you’ve been working towards for so long.

Private Mortgages - A Quick Rundown

For those that can’t find success with traditional mortgage lenders, private mortgages act as their salvation. There are 3 different types of lenders: A, B, and unregulated lenders.

A and B lenders refer to traditional mortgage lenders. A lenders constitute major banking institutions such as TD, ScotiaBank, RBC, BMO, and CIBC. These institutions offer the most meticulous examinations and are regulated by federal institutions and provincial institutions. B lenders are categorized as financial institutions such as Equitable Bank and Home Capital. These offer a far lower barrier for entry than traditional banks but also offer sub-par deals with high interest rates to trap you in.

Unregulated or private regulators offer a wide range of possibilities since they can come from any individual, syndicate (group of individual investors) or mortgage investment corporation who offer fair and affordable mortgages for those who aren’t accepted by A lenders and/or can’t afford the deals offered by sky-high interest B lenders. At a time when stable income is harder to come by than ever before and credit ratings across the board have slumped, private lenders become ever more appealing to your average future homeowner.

Why Private Mortgages?

Private mortgages do come with higher interest rates as well as additional lender and broker fees to compensate the lender who is taking a greater risk deciding to lend you the money. On the other hand, paradoxically, a private mortgage deal might be cheaper per month than a mortgage obtained from an A or B lender. Here’s why.

Generally, mortgage payments require you to pay a specified amount of your principal as well as an interest amount. Private mortgages on the other hand only require you to make monthly payments on your interest amount. This can be a major lifeline for people who suffer from a few months of depleted income which could be catastrophic with an A or B class lender. This format also lends itself well to mortgage refinancing and consolidating one’s debt using the equity you currently have available. 

Who Qualifies for Private Mortgages and Who Does It Benefit Most?

For individuals with lower credit scores or difficulty with proving income, a private mortgage could be the lifeline you need to get back on track. Last minute emergency mortgages can also be retrieved from private investors willing to give the little guy a shot when other lenders scoff at your pleas.

  1. Self-Employed Individuals: These individuals have a harder time proving their income due to the nature of their work. At Mortgage Central Nationwide, we believe in the small business owner through our self-employed mortgage pathway.

  2. Poor or No Credit History: Have you ever made a mistake that you regret? Maybe you borrowed more than you could handle in your younger years or perhaps did something that you aren’t proud of. The past is the past and we understand people change with the times, even if the big banks do not.

  3. Refinancing Not Available: If you are having a hard time finding a lender willing to help you refinance your property, you’re in luck. Everyone deserves a second chance and we’re sure with a bti of a buffer that you’ll get back up and running in no time.

  4. Emergency Funding/ Quick Closing Mortgage: Those that require emergency funding or perhaps a quick mortgage during your home’s closing to act as a bridge loan so you can move into your new residence hassle-free.


Private mortgages can serve as a last resort for many stuck between various contractors demanding payments and banking institutions who no longer trust that you’re worth your salt. Since private mortgages tend to have higher interest rates due to the increased risk on the lender’s part, it is suggested as a short-term solution. It is generally always better to consult with a trusted mortgage broker to discuss various alternatives and refinancing options before coming to a decision.

At Mortgage Central Nationwide, our detail-oriented, diligent, and experienced staff will strive to ensure you find a private mortgage with the best terms and conditions and advise you on the next best steps to take to get you that perfect home.

To learn more about options available to you, contact us at 1-866-789-6315 to learn more about private mortgages and speak with a private mortgage specialist today!