Canada’s mortgage approval requirements continue to tighten, making it more difficult than ever for Canadians to purchase their dream properties. Luckily, private lenders exist across Canada, and they’re willing to help buyers access the funds they need to get into their next home. At the Chris Allard Mortgage Team, we can help you find a lender who’s willing to work with you, even when you’ve been turned down by the big banks.

What is a Private Mortgage?

Simply put, a private mortgage is a mortgage that isn’t held by a bank, credit union or mortgage company. Instead, funds are loaned by an alternative party, such as a business or even an individual.

How Do Private Mortgage Lenders Work?

The lending process with a private lender is similar to the process of borrowing from a bank. You’ll still be required to submit proof of income and credit information before you’re able to borrow the funds. Paying back a private mortgage is done via monthly payments, just as you would with your typical bank mortgage.

Why Choose a Private Mortgage?

Private lenders in Ottawa aren’t subject to the same rules as banks and don’t have to put you through the same stress testing. Generally, this means they’re easier to qualify for and the approval process is considerably faster.

Obtaining a Private Mortgage

The best way to obtain a private mortgage in Ottawa is by working with an experienced mortgage broker who specializes in this area. A qualified broker can find verified lenders and negotiate everything from your principal amount to your payments and interest rate on your behalf.

Frequently Asked Questions

Yes. Private lending is completely legal in Canada.

Private mortgage rates are generally higher than the interest rates you receive with traditional, best-rate lenders and banks, and these rates can vary depending on if you’re obtaining a first or a second mortgage.

Regulatory requirements in Canada are generally less stringent for private lenders as they are not focused on income qualifications. This allows for private mortgages to become very flexible and easier to get approved for. A qualified mortgage broker can help with this process.

A private lender is the best choice if you have damaged credit and can’t gain approval from a traditional bank or lender. Private lenders are also a great choice for those who are self-employed or new to Canada and are unable to prove steady income for at least two previous years. Alternatively, they’re an ideal option for real estate investors and/or individuals who prefer to flip properties to generate income.

Contact us

To learn more about private mortgage lenders in Ottawa, get in touch with our private mortgage agents to schedule a consultation now.

Private Mortgages Mean More Flexibility

For situations where banks are unable or unwilling to lend money for your mortgage, private lenders are an alternative option for borrowers. In fact, a private mortgage or loan may be the preferred option, depending on your circumstances.

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Private Mortgages Defined

A private mortgage is a short-term loan sourced from a private lender such as an individual, business, or a small group of investors. These lenders are able to make their own rules and restrictions when it comes to lending funds and often do not use the same criteria as banks when approving mortgage applications.

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Why Seek Out a Private Mortgage?

Private mortgages are often sought out by borrowers with bruised credit that are not eligible for a traditional mortgage with the best rates and terms from a bank or financial institution.

Private lenders also typically offer more lenient repayment terms and are more flexible in their terms while financing your loan.

A young couple sitting on the couch stressing over their financial statements

Worried About Your Source of Income or Borrowing History?

There are many private lenders in Ottawa that will grant you a mortgage, even with a bad credit history. Because institutional lenders are stricter about their mortgage underwriting, including who they can lend to, many people with bruised credit do not realize they can get a mortgage.

The strict regulations with institutional lenders are especially inconvenient for people with non-traditional incomes such as service workers, seasonal workers, and self-employed individuals.

With private lenders, a mortgage may be within your reach, no matter your history. Chris Allard provides you with options, and private lenders take many factors into consideration, including unconventional income and personal history, not simply your credit rating.

Many private lenders include the opportunity of a lower rate after you demonstrate a positive repayment history, and can even help rebuild and improve your credit, getting you a better rate just a few years into your mortgage!

A young couple sitting on the couch stressing over their financial statements

Obtaining a Private Mortgage

When it comes to getting approved for a private mortgage, this process looks a bit different compared to traditional bank mortgages.

With traditional residential mortgages from a bank or other major financial intuition, lenders will heavily weigh factors like your credit score and borrowing history, steady income, employment history, etc. But private lenders tend to focus more on your property type and value, your income, and your down payment (many private lenders will require at least 15% of your home’s value as a down payment compared to just 5% from traditional lenders).

Interest rates also tend to be higher with private mortgages, which is why it’s recommended that you take advantage of a private mortgage while you work towards repairing your credit. Once you are in a better place credit-wise, you can look into the possibility of refinancing with a different lender at the end of your term.

If you are considering a private mortgage, get in touch with an experienced mortgage broker to help you through the process. A broker will be able to look at your file and see if a private lender will be a good fit, connect you with the right lender, and help you understand your mortgage terms.

Obtaining a Private Mortgage

When it comes to getting approved for a private mortgage, this process looks a bit different compared to traditional bank mortgages.

With traditional residential mortgages from a bank or other major financial intuition, lenders will heavily weigh factors like your credit score and borrowing history, steady income, employment history, etc. But private lenders tend to focus more on your property type and value, your income, and your down payment (many private lenders will require at least 15% of your home’s value as a down payment compared to just 5% from traditional lenders).

Interest rates also tend to be higher with private mortgages, which is why it’s recommended that you take advantage of a private mortgage while you work towards repairing your credit. Once you are in a better place credit-wise, you can look into the possibility of refinancing with a private lender at the end of your term.

If you are considering a private mortgage, get in touch with an experienced mortgage broker to help you through the process. A broker will be able to look at your file and see if a private lender will be a good fit, connect you with the right lender, and help you understand your mortgage terms.

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Want to Learn More?

Chris will happily offer you a no-obligation consultation to answer all of your questions.
Give him a call today, and he will be in touch soon!

CONTACT CHRIS TODAY TO LEARN MORE!