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Private or alternative mortgages are funds that originate from private individuals, mortgage investment companies (MICs) or mortgage finance companies (MFC) who lend out for investment purposes. Private or alternative mortgage providers are willing to lend money out to borrowers who have equity in their property, need financing for a short term (up to 3 years), and don’t qualify for a mortgage by other means.

The mortgage can be a first mortgage, or, it can be a mortgage in second or third position. 

Alternative lending is aimed at borrowers who do not meet traditional lending criteria and when traditional loans cannot be approved. When a home buyer or real estate investor cannot qualify under a large number of requirements that the conventional lending sources need to be satisfied before they are able to lend, the viable options are private or alternative mortgages.