If you are a first-time home buyer, you might not qualify for a traditional mortgage. If this is the case, there might be options available to you – and one option is a private mortgage. It’s perfect for home buyers who have a less-than-perfect credit rating but still have good equity and income.
It’s interesting to note that private mortgages account for around five percent of Canada’s overall mortgage market and this number is increasing every year. These financing options make it easier for people to buy a home, especially referring to the fact that there are now stricter regulations at banks and first-time home buyers that don’t qualify immediately to purchase a home.
Private mortgages are meant to be short-term loans, and they are becoming increasingly popular among people struggling to qualify for a traditional mortgage. This is also why private mortgages should be seen as a last resort when purchasing a home. In the Canadian market, it is currently a booming industry, and it can help you to get the much-needed financial relief you need.
What Is a Private Mortgage?
A private mortgage is essentially a loan that is given against the property itself and may attract a higher interest rate due to the fact that they are generally considered to be a higher risk. This is often provided by private lenders or even angel investors who offer financing to qualified buyers.
A private mortgage can be more expensive at the end of the day, but often the only option for buyers who would otherwise not have been able to buy a home. You may still choose to pay off the loan faster if you are in a position to do so, to reduce your overall repayment amount.
Private mortgages are often referred to as secondary mortgages and the credit part is not as important as the home itself. Lenders will take a look at your home and property value, and then determine how much you will qualify for. This is also a great option for people who may be facing foreclosure, and it can be a real life-saver for people with a first mortgage.
Mortgage Guys can assist first-time home buyers with a private mortgage. We assist you in getting a second mortgage as we know that it can be a great benefit for buyers. If you have a slightly negative credit rating but still have a good income and equity, speak to us today.