Most homeowners will never need a private mortgage, but for those who do, it can be a essential tool for short-term financing. Unlike traditional loans, private mortgages focus on the equity in your property rather than your income, credit score, or job history. These loans come with higher interest rates—often 10-12%—but they serve a very specific purpose.
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When Does a Private Mortgage Make Sense?
A private mortgage can be a smart solution in certain situations, including:
- Paying Off Debt Quickly – If you owe back taxes to the CRA or need to consolidate high-interest debt, going private can provide the funds you need.
- Bridging Employment Gaps – If you’re between jobs or a seasonal worker with a large down payment but no recent pay stubs, a private mortgage can help you secure a home now.
- Short-Term Financing Needs – Sometimes, life throws unexpected expenses your way, and a private mortgage can help you stay financially stable until you’re in a better position to refinance.
The Cost of a Private Mortgage vs. Renting
While private mortgages carry higher interest rates, they can still be more cost-effective than renting. Why? Because rent is essentially infinite interest—you’re paying each month without building equity. With a private mortgage, you’re still investing in your home and have the opportunity to refinance to a lower rate once your financial situation stabilizes.
Is This Mortgage Solution Perfect For You?
This solution isn’t for everyone, but in the right circumstances, it can be a valuable financial tool. If you’re unsure whether it’s the right fit for you, let’s talk.
If you’re looking to get pre-approved for a mortgage to buy a property in Edmonton, fill out my online application. I’m here to help you every step of the way.
About Jason Scott, Edmonton Mortgage Broker
Looking for a personalized mortgage solution? As an Edmonton Mortgage Associate, I’ll be your trusted partner who will help you get the right mortgage for your family home or Investment property. I’m Jason Scott, and I’ll be your Mortgage Broker in Edmonton.
