Private Mortgage Solution for Mortgage Arrears

A Home Equity Line Of Credit (HELOC) is a flexible way to tap into the equity in your house.

The fund drawn from a HELOC could help borrowers consolidate their personal debts, including mortgage arrears.

Borrowers just have to qualify once and have the option to withdraw funds multiple times from the HELOC at any time without requalifying for each draw.

A home equity loan is the most straightforward financing option for property tax arrears.

A home equity loan is a type of secured loan.

However, unlike the Home Equity Line of Credit that allows multiple draws from the line of credit, with a home equity loan the lender proceeds the funds once on the Closing Day and borrowers are given a payment schedule for the entire duration of the mortgage term.

The process of obtaining financing for commercial properties with a private mortgage is much simpler than the process for traditional lenders. Although private lenders will still ask to verify some information to satisfy their internal lending guidelines, in general, it may actually be faster and easier.

Private lenders assess a mortgage loan application based on the allowable use according to the city by-law and its location in the neighbourhood. A property appraisal is certainly a requirement that borrowers will need to satisfy as part of the refinancing process.

Generally speaking, private lenders will allow higher loan-to-value (LTV) than traditional banks and lenders. 

Private lenders are an ideal option since they are not tied to the same lending guidelines as traditional lenders which is limiting. Unlike bank loans, private lenders focus more on the value of the property and the borrower’s exit strategy to determine the terms of the loan. This means that they will not make any preconditions on the borrower’s credit score or debt to income ratio.

A big advantage of hard money lending is that you can beat traditional lenders’ interest rates and timeframes. While traditional banks are known for their long loan terms, hard money loans can close in just days or weeks. This is important in time-sensitive situations, such as paying off mortgage arrears immediately. Getting a mortgage loan approved faster helps you resolve your personal situation faster and avoid delays.

Origination fee can also be referred to as “commitment fee”, or any other name. It usually refers to the underwriting or processing fee. This fee can cover a variety of expenses, from processing the loan to underwriting the loan. The amount of this fee depends on the lender and the type of mortgage loan. It is always stipulated in writing so there is no bad surprise to the borrowers on the closing day. If you are not sure how much you are paying for your origination fee, it is a sign that you are not working with an ethical private lender. Be aware and find other private lenders who are transparent with their origination fees.

At Canadian Private Mortgage, we disclose our commitment fee clearly in writing from the beginning of the process.