What Is a Private Mortgage?
If you live in Vancouver, BC, a private mortgage fills in the gap left by traditional lenders like banks, credit unions, and B-Lenders. Relying mostly on your home’s equity rather than your personal situation, private loans will allow you to get approved for a mortgage regardless of your current income or credit. These types of financial products are a good solution for clients that have bad credit, are unemployed, or who cannot provide the endless amounts of paperwork that the banks often require. A private mortgage is generally written as a first or second mortgage over a twelve month period, and with the loan to value ratios not exceeding 70%, it is ideal for funding a home renovation, bridge financing, or paying debts.
Are Private Mortgages Better Than Banks?
Private mortgage lenders in BC are better than banks if you are looking for a fast way to be approved for a loan, with little requirements and less strict rules. Banks, on the other hand, are significantly cheaper than private lenders. Homeowners usually prefer to use private lending when they need a source of funding, but their bank is unable or unwilling to help. Since these mortgages are a form of home equity loans, their primary focus is on the asset being offered as security. Traditional mortgages, on the other hand, take income or credit challenges into consideration too.
How Much Do Private Lenders Charge?
Private lenders may charge different amounts depending on the company’s guidelines, your loan to value, and what funds are required. Interest rates can start as low as 4.95%* and up for 1st mortgages, and 6.95%* and up for a 2nd mortgage. Please note broker/lender fees as well as legal costs/appraisal costs do apply. If you are interested in discovering more information about our private mortgages in BC, please do not hesitate to contact us.
Can You Get a Private Second Mortgage?
When working with the best mortgage broker in BC, you can get a 1st, 2nd, and even 3rd mortgage. Unlike a mainstream mortgage loan, our lenders assess the applications based on their individual merits and are not bound to follow strict rule-based underwriting standards. Although when it comes to 2nd mortgages, most lenders require that the 1st to be from a conventional lender, we have private mortgage lenders in BC that approve 2nd mortgages even behind another private one, *conditions apply.
Do You Need An Appraisal to Get a Private Mortgage In BC?
Most lenders require an initial appraisal of the real estate to approve a private mortgage. Among our top lenders in Canada, we do have some that would offer mortgages at lower loan to values without an appraisal, but this is not always guaranteed.
Appraisals help lenders to look at more than just the value of your property. It enables them to see at what prices other homes in the area that are similar to yours have sold at, and it assists them in evaluating the condition of your house. Many lenders require an unbiased set of eyes to review what activities may be going on in a home, i.e. home use is not being used in a conventional way.
How to Get Approved
If you are looking to get a private mortgage from our lenders in BC, you should know there are certain fees that can be associated with your application. These costs can be related to the lender’s or broker’s fees and also be legal and appraisal expenses.
Terms are also something that is important when considering a private mortgage. Most terms are for one year with the addition of either open or closed mortgage terms, while the majority of closed terms can be paid out with a 3-month interest penalty. When it comes to renewal costs, some lenders have a small renewal fee, while others have higher renewal costs.