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Most Canadians are not familiar with the concept of private mortgage or private fund. Private Mortgage or Private Fund or Private Loan fill the gaps that the Institutional Lenders, such as the banks, are unable or unwilling to fill. They offer an alternative source of financing to borrowers and a high yield investment opportunity for investors.

What are Private Mortgages?
Private Mortgages are funds that come via Private Individuals investing in private mortgages and lending out for Investment purposes. Typically many of these funds still travel through the same traditional Banking Institutions, who help their clients connect their self directed funds to Borrowers.

Who are the Lenders?
In most cases Private Lenders are retired individuals who are looking for a better rate of return than is available to them at a Bank. They are willing to fund private money mortgage or private held mortgage as they can usually generate a greater return for their investment dollar.

Why use Private Funds?
The traditional Institutional lenders are usually conservative by nature and like to deal with mortgage transactions that meet their normal lending criteria. As Institutional Banks become bigger and interest rates become lower, the requirements for “perfect” deals increases and deals that do not fit their mould are either cut back or summarily declined. Private Mortgages have filled the gap left when the small Trust Companies left the Canadian scene in the nineties.

Real Estate Investors seek Private Mortgages for a number of reasons. Typically, for reasons of a “unique deal,” expedience, credit issues, self employment, or when a borrower cannot qualify under the large number of requirements that the conventional lending sources need to be satisfied before they are able to lend.

What are the Interest Rates on Private Funds?
A Private mortgage lender will base the interest rates on private fund depending on the area, type of property, degree of risk they perceive, and estimated costs of administration (collection). Interest rate on private mortgage typically range between 9% for first mortgages to 15%+ for second and subsequent mortgages.

What will the Broker require in order for me to qualify?
The private mortgage broker will require a current appraisal, Credit Bureau, proof of income/job letter as confirmation of the earning power of the prospective borrower.

What do Private Mortgages cost?
Typically a borrower using the private mortgage market funds will be charged 3% of the funds borrowed. As well the Borrower is responsible for the Appraisal fees, Legal costs of the lender, and mortgage insurance.

We also work with investors investing in private mortgages to receive better rate of return from a high yield private mortgage. The private mortgage broker at Mayrak Financial Solutions will negotiate the interest rate for both the borrower and the seller financing private mortgage.

Contact us and we can help negotiate and provide your mortgage or fund needs even when you are not qualifying for credit from banking institutions. We also work with clients who have had poor credit , bad credit or no credit at all.