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PRIVATE FINANCING - How Does it Work?

Posted by Sean Stewart on 5 April 2021
PRIVATE FINANCING - How Does it Work?
Private financing in Canada has exploded over the last few years. With tighter mortgage regulations it has become harder for borrowers to qualify for the mortgage that they need. This has forced homeowners to search for alternative forms of home financing.

Qualification: In general, private lenders do not use the typical debt servicing calculation to qualify you for a mortgage. Though, the lender does want to see that you have the ability to make your mortgage payments. Hence, it tends to be very easy to qualify for private financing.

Interest Rate: The interest rate and fees charged by lenders is based on an assessment of risk. The higher the risk of the transaction, the higher the interest rate and fees. The risk assessment includes income, credit history, debts, property, and assets.

Exit Strategy: It is also key to have a clear exit strategy of how you plan on getting out of this private mortgage. Good private lenders see this as a temporary solution that allows you to improve your situation until you can qualify for more traditional mortgage financing.

Private mortgage financing is secured by your property that will require an appraisal and requires you to have your own lawyer to close the transaction.

Contact Us
For more information on private financing, contact your local Ajax Mortgage Broker, Sean Stewart at 905-427-9596 or sean@seanastewart.com
Author: Sean Stewart
About: Mortgage Broker
Tags: Mortgage Products

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