You never know when you might be faced with an unexpected expense or home renovation. A private mortgage can help you stay on track without the hassle and restrictions of working with a bank. Major banks in Canada have a time-consuming loan process which can leave borrowers scrambling to get the money together for important expenses. Group Capital can make this process easier, with knowledgeable advisors and a streamlined process that gets your loan request on the fast-track to approval.
Private Mortgage
Whether you need $50,000 or $5,000,000 Group Capital is your best alternative to a bank!
Private Mortgage with Group Capital
- Fast & secure application process
- Any credit score approved
- Minimal documentation
- No hidden service fees
- Personalized financial advice
- Get money within a week*
What is a Private Mortgage?
Private mortgages are short-term, interest-only loans, that usually range from 1 to 3 years, unlike more lengthy bank loans. Rather than paying the principal down, borrowers pay the interest each month.
There are many reasons to choose a private mortgage lender instead of a bank such as:
- You need money quickly and don’t have time to go through a lengthy approval process.
- You have bad credit and a bank or conventional lending institution will not approve a loan.
- You want to consolidate your debt or pay off high-interest credit card debt
- To cover living expenses after a work layoff
- To stop a power of sale or foreclosure
- To pay tuition fees for college or university
Private lenders look at several factors before approving a loan including equity and income level. This helps them determine the risk associated and how much the borrower can afford to take on.
Private Mortgage Calculators:
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How does the Private Mortgage work?
First, the private lender looks at a property value. This will determine the equity value of the home.
Property Value
Before being approved, your property will be assessed to determine the value. This is arguably the most important factor in being approved by a private lender.
There are many sources of income in today’s new job world. Not everyone receives a traditional paycheque from a 9-5 job. All your income streams will be taken into consideration before an approval can be made.
Income
Private mortgages are an excellent option for people with non-traditional income such as independent contractors or self-employed also known as confirmable and non-confirmable. Confirmable income is preferred by lenders and is proven through Notice of Assessments (NOAs). Non-confirmable income is determined by the average income of someone in a similar field.
Private loans can be used for many reasons including consolidating debt. A lender will look at how much equity you have in your home to determine a loan amount and interest rate.
Equity
If you are refinancing, private lenders may allow you to go up to a maximum of 85% in loan-to-value.
A down payment is an important determinant of how much you can afford to spend on a home. The more you can afford to put down, the more likely you are to get approved.
Down payment – When using a private lender, you must put down a minimum of 15% on the purchase price. It is always advisable to put down more if you can afford to do so.
Private Money Lenders VS Banks
A private mortgage offers several key differences from a bank. The interest rate is higher and the term is shorter, running 1 to 3 years. Loans from private lenders can also be approved much faster than a bank loan, often within a few days.
Borrowers can rest assured that bad credit will not necessarily mean they get declined for a loan from a private lender. Since your loan is based on the value of your home, there is more flexibility for lenders. This is calculated by using the Loan-to-Value ratio or (LTV). The LTV for a property is equal to all mortgages on a property divided by the appraisal value of the property.
Types of Private Mortgages
There are three types of private mortgages:
Individual – Private lenders using personal funds to provide loans to a borrower
Syndicate – A group of lenders who pool their funds to provide loans on a case-by-case basis
Mortgage Investment Corporation – A group of investors who provide loans to multiple borrowers who fit the lending guidelines.
Private Mortgage Lenders
A private mortgage is a great alternative to accessing cash fast without having to go through the long bank loan application process. Group Capital offers the knowledge and expertise to help you easily navigate the private mortgage process. Let our team help you achieve your financial goals using the equity in your home to make the improvements you want to your home improvements or consolidate debts.
* Some conditions apply.
Private Mortgage FAQ’s
Private mortgages are the perfect solution for short-term financial needs. Most private mortgages are set for 1 to 3 years depending on your situation. This means that the final payment will be due at the end of the term, with the option to extend or renew.
Yes, you can get a private mortgage even with bad credit. The lender looks at several factors when considering approval include the value of your home and your income. To improve your chances of being approved, try to pay off as many existing loans or debts as possible to improve your credit score.
- Very poor credit: 300 to 579
- Fair credit: 580 to 669
- Good credit: 670 to 739
- Very good credit: 740 to 799
- Excellent credit: 800 to 850
Rates vary for private mortgages depending on how much is being borrowed and your credit history. Group Capital offers the most competitive rates in the industry.
The LTV for a property is equal to all mortgages on a property divided by the appraisal value of the property. If you own a home worth $2,000,000 and get a new first mortgage for $1,500,000 then your LTV ratio is 75%.
Yes, a second mortgage is a great way to consolidate debt, cover the cost of home renovations or act as a bridge loan. While a first mortgage puts a first lien position on your property, a second mortgage is done in conjunction with the first mortgage and puts a second lien on your property.
There are several fees associated with a private mortgage.
These may include:
- Legal Fees
- Land Transfer Taxes
- Real Estate Fees
- Broker and Lending Fees
- Private Mortgage Insurance
If all your paperwork is in order, it usually takes about two weeks for approval. There are some cases where you can be approved faster, but a higher interest rate may apply.
Use our mortgage calculator to discover how Group Capital can get you the best rates on your private mortgage. With just a few simple pieces of information, you can quickly learn how much you could qualify for on your private mortgage.
Contact us today to see how easy it is to do the things you want to do with the equity in your home.
