Private Mortgage Lenders in Montreal

A mortgage of second rank is commonly referred to as a second mortgage since the purchase loan is the first mortgage, secured by a lien on your property. A second mortgage, or home equity loan, means borrowing money against the portion of your house that you own, which is referred to as equity. The capital derived from the equity in your home can fluctuate, but generally grows over time.

A second mortgage is a great way to raise collateral for any number of purposes. Securing a private mortgage from a traditional source like a bank, however, can be challenging. For many, the best course of action is to rely on a private second mortgage lender. This way, you can benefit from expediency, flexibility, and more competitive interest rates on top of all the advantages taking a private mortgage offers. Contact us to secure your private mortgage today!

Many types of second mortgages exist, but the three most common types are:

Lump Sum

This type of second mortgage provides a lump sum to borrow and use for any reason.  The loan is paid off gradually over time, with fixed monthly payments.  Each payment covers a part of the interest accrued, as well as a portion of the principal loan balance.  This payment process is known as amortization.

Line of Credit

This type of loan does not require a specific amount of money to be taken out, instead allowing you to access a maximum borrowing limit specified by your lender, and the value of your home. Similar to a credit card, you can borrow money and make multiple repayments.

Rate Choices

The different rates available vary according to the type of loan chosen, and what is offered by your lender. A fixed interest rate will remain the same for the life of a loan, while a variable interest rate will fluctuate according to market value.

Loan Amount

Private mortgages allow you to borrow significant amounts of money against your home’s equity, allowing you access to more capital than using your home as collateral would permit. The maximum loan amount will factor in all of your home loans, including your first and second mortgages, but can rise as high as 80% of your home’s value.

Low Interest Rates

Private mortgages typically boast far lower interest rates than other loans. By securing the loan with your property, you reduce the risk for your lender, allowing them to offer you lower interest rates. These interest rates often dip into single digits.

Tax Benefits

A deduction for the interest paid on a private mortgage may be obtainable.  To find out if you qualify, discuss the matter with your accountant and learn about the available options.

Flexible Payment Arrangements

Taking out a private mortgage allows you to extend your amortization, or the length of time you have to repay the loan. As such, it is possible to scale your monthly payments according to your income.

There are many benefits to using a private lender instead of a traditional source, such as a bank, when taking out a private mortgage loan:

Easier Qualification

It is much easier to qualify for a private mortgage than it is to qualify for a traditional loan.  Traditional lenders are required to use stringent guidelines, which disqualify all borrowers except those conventionally considered low-risk. Private mortgage lenders, conversely, avoid focusing on strict standards related to credit history, considering property value as the main factor in loan approval. Furthermore, a borrower’s assets, income, and general ability to manage a mortgage are taken into account.

Expediency

Securing a private mortgage is typically a tedious and lengthy process with banks, involving extensive documentation, credit and background checks, and proof of income. This can disqualify many borrowers, including the self-employed and new immigrants. Private lenders, however, have more flexible standards, simplifying the process and making it inclusive. They request only essential information for quick lending decisions. Consequently, private mortgage lenders offer fast financing with reduced approval and processing times. Private mortgages can often be secured in just days.

Flexibility and low interest rates

Since private mortgage lenders, as opposed to banks, are not restricted by regulatory standards, they can offer more flexible financing solutions, specific to the requirements of a given borrower.  Unlike banks, a private mortgage lender can offer a range of interest rates, rather than a set rate, and are permitted to finance a number of property types.  This makes a private mortgage ideal to a broad set of borrowers.