Private Mortgages in BC: An Overview
In Surrey, private mortgages can help fill the gap left by traditional lenders like banks, credit unions, and B-lenders. Rather than relying on your personal situation, these loans primarily rely on your home’s equity. They allow you to get approval for a mortgage regardless of your current income or credit. This makes them an ideal solution for clients with bad credit, or cannot provide the amount of paperwork required by banks.
A private mortgage is usually written as a first or second mortgage over a twelve-month period, with the loan-to-value ratios not exceeding 70%. They are ideal for funding home renovations, bridge financing, or paying off debts.
Private Mortgage Lenders vs Banks: Which is Better?
Private mortgage lenders in BC offer a faster way to get approval for a loan, with fewer requirements and less strict rules. Banks, on the other hand, are generally cheaper than private lenders. Homeowners typically prefer private lending when they need a source of funding, but their bank is unable or unwilling to help. As private mortgages are a form of home equity loans, their primary focus is on the asset being offer as security. While traditional mortgages take income or credit challenges into consideration too.
How Much Do Private Lenders Charge?
Private lenders may charge different amounts depending on their guidelines, your loan-to-value ratio, and funding requirements. 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. To learn more about private mortgages in BC, contact us today.
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 mainstream mortgages, we evaluate applications based on individual merits, not strict underwriting standards. Although most lenders require 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 Mortgages in BC?
Most lenders require an initial appraisal of the real estate to approve a private mortgage. Although some top lenders in Canada offer mortgages at lower loan-to-values without an appraisal, it is not always a guarantee. Appraisals help lenders in assessing your house’s condition and determining the sale prices of comparable homes in the area.
How to Get Approval
If you are looking to get a private mortgage in BC, note that certain fees can be associated with your application, including lender/broker fees, legal fees, and appraisal expenses. When taking a private mortgage, terms are crucial to consider. Most terms are for one year and include open or closed mortgage options. Closed terms typically have a 3-month interest penalty for early payout. Renewal costs may also vary between lenders.
If you want to know more more about private mortgages in BC, Contact us today. Speak with one of our experts who are ready to answer your questions and help you explore your options.