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If getting a mortgage has turned out to be a difficult process for you, it may be time to start looking into alternative ways to get approved. 

The decision to go with a private mortgage has to make sense.  Here are some scenarios when it is a good solution and if one of the cases below fits your current mortgage situation then you should consider working with a private lender:

  • You are trying to buy an unconventional or unique property that a bank or another lending institution is not ready to finance
  • You are self-employed: you could be a business owner with lots of expense deductions and low reported taxable income. Or maybe you have been self-employed only a short time—fewer than the two years A-lenders prefer to see
  • You have a lower than average income or a non-traditional income source and you find it’s affecting your ability to qualify
  • You cannot pass the mortgage stress test: inability to meet maximum debt-service ratios
  • You need quick financing without having to wait for long approval processes
  • You need to access the equity in your home but the penalty to break your current mortgage is too high, and you don’t have enough income to qualify for a HELOC or second mortgage with a financial institution
  • You have past credit challenges such as bankruptcy or consumer proposal
  • You have a bad credit history or lower credit score and is restricting you from getting a mortgage from a more traditional lender
  • You need to consolidate high-interest debt, but due to bad credit, you have been turned down for refinancing or you want to obtain a second or third mortgage to finance a renovation or for another purpose
  • A divorce, illness or some other life-changing event has hurt your credit rating.  You need mortgage financing until you get back on your feet
  • Your existing mortgage is in arrears, power of sale or foreclosure.  You need to take out equity from your property to get you back into good standing
  • You want to purchase vacant land or a unique property that institutional lenders won’t touch because it’s outside of their lending criteria
  • You’ve sold your existing property and bought a new property, but your purchase closes before the sale.  You need bridge financing, but your lender doesn’t offer it 
  • You sold your existing property and bought a new property, but the sale of the existing property fell through.  A private mortgage can tide you over until the property is sold again
  • You’re interested in buying a “flip” property or a home that is in major disrepair, and you need financing to fund your renovation
  • You need a short-term loan for only a few years
  • Your income debt ratio is significantly too high
  • You require your payments terms to be more lenient