Private mortgages are similar to traditional mortgages in that you must provide certain financial documents to secure the mortgage. The biggest difference with private mortgages is that you have increased flexibility in a number of areas resulting in a more customized solution.
Private mortgages also differ from traditional mortgages in a number of ways.
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If you are looking for flexible financing and have not been successful with traditional lenders, a private mortgage may be an option for you. We work with clients from all walks of life who are looking for alternative mortgage financing options and often private mortgages.
Here is an example of a client who was frustrated with a traditional lender and found the right opportunity with a private lender:
Jason is a 45 year old business owner. His primary home is in Toronto and he was looking to finance his dream Chalet in Collingwood. After getting rejected from 3 traditional lenders he turned to the team at SafeBridge to help finance his Chalet renovation.
Purchase Price $1.6M
Renovation Cost: $800K
Private Financing: $800K for 9 months at 8.2%
Appraisal of completed renovation came in at $3.1M
The result was a fabulous renovation on Jason’s dream property and after a post-renovation appraisal Jason was able to refinance with a traditional lender at 1.65% variable on a 30 year amortization resulting in both increased equity in the property as well as a lower interest rate through a traditional lender.
Remember, not all financing needs to be with a traditional lender. At SafeBridge we work with over 63 different lending institutions to help you find the best mortgage product that suits your needs.
Since pirate mortgages are riskier than traditional mortgages, private leaders are not willing to lend to borrowers with high LTV ratios. Having a LTV ratio above 75% may limit your private mortgage options, whereas traditional lenders (banks, A lenders) will allow for much higher LTV ratios.
Private mortgages often come with higher interest rates as you are required to pay both a lender fee and a broker fee. In addition, a higher LTV can lead to more expensive interest rates because it is a higher risk for the lender to allow you to borrow money so they will charge you a premium on the interest rate to account for that additional risk.
Traditional mortgages typically include the lender fee in the overall cost of the mortgage while private mortgage lenders usually charge a lender fee of 2% of the private mortgage amount. This fee is always discussed up front but it is important to factor this into your overall budget.
In addition to lender fees you will also need to pay a broker fee to the mortgage broker who is “brokering” your mortgage. Mortgage agents who do private mortgages are licensed as specialized brokers and will charge a 2% fee typically matching the lender fee.
While there are many benefits of going with a private mortgage, below are the top 3 reasons we would recommend you consider a private mortgage.
At SafeBridge our access to dozens of private lenders sets us apart. With over 20+ years in the private lending space our team of mortgage professionals is qualified to help you find private financing that suits your needs.
No two mortgage scenarios are alike and we pride ourselves in customized solutions that solve your unique challenges.
When you work with SafeBridge, our team of professionals take the time to understand your situation and come up with the perfect financing solution. It is always in your best interest to work with a company that will not only help you secure financing but also keep in mind your holistic financial goals and make sure they are all in alignment. As a company we help thousands of clients each year find the perfect financing solution to fit their needs. When it comes to private mortgages our team of private mortgage brokers will assist you with finding the perfect private mortgage for you!
Every private mortgage is unique and therefore the term is specific to the client. Most private mortgage lenders typically offer short-term mortgages and tend to charge higher interest rates. The typical term for a private mortgage is 1 year or less.
There are many reasons people navigate towards private mortgages and bad credit is certainly one of them. If you have bad credit can work with a licensed SafeBridge mortgage agent to see what private lending options may be available for you with goal of increasing your credit score and moving into a more traditional mortgage option over time.
Private mortgages tend to be more expensive because in addition to your mortgage payments there are always lender fees and broker fees To make up for the increased risk, private mortgages often come with higher interest rates as well.
Chris is a Co-Founder and Financial Advisor at SafeBridge Financial Group, the originators of Mortgage Centered Financial Planning, and is passionate about serving his clients and empowering the incredible team to “Be Better. Be Inspiring.” Prior to co-founding SafeBridge, Chris started his career as a Financial Advisor with Sun Life Financial, formerly Clarica Financial Services, and had the privilege of serving many clients financial needs for over a decade.
Over the last 20 years we’ve been successful in attracting over 60 various lenders that our clients can benefit from. SafeBridge has evolved over the years and has become a very successful company…. The education, that comes along with not just the mortgage agent side of things, but also on the insurance and the investments and the financial planning all comes together in one holistic approach.
Dena is a seasoned Mortgage Broker with 24 years experience in the financial industry. She started her career at Canada Trust as a part-time Teller while attending York University. During her 15 years with TD Canada Trust, Dena held various positions of increasing seniority. As a Senior Financial Advisor she gained knowledge in many disciplines in the banking and investment arena.
For several years Andre has worked in the Financial Planning and Mortgage Solutions field with Scotiabank. After experiencing success, and gaining a wide knowledge base in the banking world, he decided to leave the bank to join a Boutique Mortgage Brokerage, Safebridge Financial Group. Andre made the change so that he could offer clients a wider variety of mortgage options and lenders.
At SafeBridge we believe in experiencing growth together. We want to ensure that each of our agents is successful and feels a part of the SafeBridge team. We offer customized training, lender previews, team events and even team trips to build the strong culture of inclusion and support that so many of our agents enjoy.
We believe it is essential to hire and Partner with the right people. We are looking for the best and brightest in the Industry to join our Exclusive Group of Professionals. Our team consists of loyal top producing Agents that have demonstrated exceptional care for their clients and passion for the industry in which they serve. Our Mortgage Centered Financial Planning approach helps our team foster long lasting relationships, which brings a unique process to the mortgage business.
With over 20+ years in the Mortgage Industry, SafeBridge has built a solid reputation in the industry and is well respected by all major lending partners. SafeBridge has partnerships with over 10 insurance providers in Canada and has access to hundreds of mortgage products.