Did Your Bank Reject Your Mortgage Application?
A private mortgage is always an available option when you’re not able to get approved at a bank. Private mortgages tend to have higher interest rates and shorter terms due to the higher risk associated with the loan. Easy-Mortgage.ca has established relationships with private lending institutions and individual investors across Ontario to make sure that we can offer you a private mortgage with the lowest fees and interest rates. Private lenders place a much larger focus on the value and condition of your property and in many cases do not take your income or credit score into consideration.
Interestingly enough, private mortgages have become increasingly more common over the past few years. This is a result of more stringent mortgage qualifying criteria at the banks and increasing home prices. Private Mortgages are usually interest only loans meaning that you are not paying into any of the principle of your mortgage balance. Our team of experts will consult with you and establish a long term plan to help improve your credit and switch your mortgage back to a bank as soon as possible where the interest rates are much lower. Private mortgages are flexible, allowing you to defer a portion or even all of your interest payments until the end of the term or have the interest paid in advance. This can be a good short term solution when cash flow is a temporary challenge.
A second mortgage is an additional loan taken out on a property that is already mortgaged. This is more risky than a first mortgage for a lender because they are in second position on your property’s title. If a homeowner defaults on their payments and the property is taken into possession, the lender in first position would always be paid out first, whereas the lender in second position runs a higher risk of not being paid out in full. As long as there is available equity in your home, a second mortgage is a good way to consolidate high interest debt and other expenses when you’re not able to refinance at a bank. In some cases our experts can get you a HELOC product if you don’t qualify to refinance the requested amount of money you need at a bank. These products carry lower interest rates than second private mortgages.