Other Services
Private mortgages
Sometimes the deal is sound and the bank still says no — a credit event, income that cannot be documented in the time available, a closing that has to happen in nine days, a property that does not fit a lender’s box. A private mortgage can solve that, at a cost. It is a bridge to somewhere, and it should never be taken on without a clear plan for getting off it.
What this covers
Underwritten mainly on the property and the exit plan
Short term, usually interest-only
Costs and exit strategy laid out in writing before anything is signed
Who arranges this
My licence as a Mortgage Agent (Level 1) covers lenders that are financial institutions or CMHC-approved, so I do not place private mortgages myself. A Level 2 colleague on my Pineapple Financial team arranges the private file. I make the introduction, stay on the file with you throughout, and pick it back up when you are ready to move to an institutional lender.
What a private mortgage actually is
A loan from an individual investor or a mortgage investment corporation, secured against your property. The underwriting logic is different from a bank’s: the lender is looking primarily at the property, the equity behind their position, and how they get repaid — rather than at your credit score and income the way an institutional lender would.
Why people use one
Common reasons: a credit event that needs time to age, self-employment income that cannot be documented on a bank’s timeline, a firm closing date that will not wait for a full institutional approval, a property or a purpose no bank will fund, or arrears that need clearing before they become something worse. Used deliberately and briefly, it buys the time to fix the underlying problem.
What it costs, plainly
A higher rate than an institutional mortgage, plus lender and brokerage fees, plus legal costs — and the term is usually a year, often interest-only. You should see every one of those numbers in writing, totalled, before you sign anything. If anyone is vague about fees, that is the moment to stop.
The exit is the whole point
A private mortgage is not a place to live — it is a place to pass through. Before signing there should be a written plan for how you leave it: refinance to an institutional lender once the credit issue has aged out, complete and sell, or restore documentable income. If nobody can describe the exit in a sentence, the deal is not ready.
What Ontario rules give you
Ontario’s mortgage brokering rules require that you receive written disclosure of the terms, the fees, the parties and the risks before you commit, and that you have time to read it. Use that time. Take the documents to your own lawyer — not the lender’s — and make sure you understand the renewal terms and what happens if you cannot repay on the maturity date.
If a private mortgage is not necessary, I will tell you
Plenty of files that arrive convinced they need private lending do not. Sometimes it is an alternative lender at a far better rate, sometimes it is a few months of credit work first, sometimes it is a second mortgage from an institution. It costs you nothing to have me look before you accept a private offer.