Private mortgage lending in Brantford

Private financing exists for the deals the banks can't move fast enough on: a Brantford purchase that has to close in days, a power-of-sale to stop, a renovation to fund before a refinance. It's equity-based — up to 75% LTV on a first, 85% combined on a second — so income and credit matter far less than the position in your home. Funding runs 7–21 days. Rates and lender/broker fees are higher and always disclosed in writing before you sign; this is priced access to a specific window, not a long-term mortgage.

Private capital comes from regulated Mortgage Investment Corporations (larger, more institutional, more predictable) and individual lenders. We place your Southwest ON file with the source whose terms and reliability fit it. Either way the plan is the same: 12–18 months, then out. We re-evaluate every quarter and engineer the refinance back to B- or A-lender pricing as part of the original deal — past 24 months means an exit window was missed, and we don't let that happen quietly.

These are different products and the choice is usually decided by what your existing mortgage costs, not by which is cheaper on its own. A private FIRST replaces the mortgage you have: on Brantford's $696,351 value at 75% loan-to-value that is $522,263, about $3,260 a month interest-only at 7.49% — and it prices your whole balance at the private rate, including the part that is currently sitting at an A-lender rate. A private SECOND leaves that first alone and sits behind it: to the 85% combined ceiling, behind the $348,176 first this page assumes, that is $243,722 at 12.99%, or $2,638 a month interest-only. The second carries the higher rate because it recovers last if the house sells, and it is still normally the cheaper answer, because only the new money is priced at it. The exception is a first that is already expensive, or a first whose lender will not permit a charge behind it — and that is a question we answer by reading your existing commitment, not by guessing.

The rate is the smallest part of the answer and quoting it alone is how this product gets people into trouble. Take the $243,722 second above over 12 months. Interest at 12.99%, interest-only, is $31,656. A lender fee at 1% to 3% of the advance is $2,437 to $7,312, and it is normally deducted from the money you receive rather than billed to you, so you are paying interest on a sum larger than the sum that reaches your account. Independent legal advice, the lender's own legal costs and an appraisal typically add around $2,500 on a file this size — our own placement experience rather than a published figure, and it moves with complexity. Total: $36,593 to $41,468, or $3,049 to $3,456 a month once you spread it. Against the money actually advanced, over the actual term, that is an effective 15% to 17% a year. Compare THAT number with the alternative, because it is the honest one. And if the term is shorter than 12 months, the fees do not shrink with it — a six-month private costs nearly the same in fees as a twelve-month one, which roughly doubles the effective annual rate.

A private mortgage is secured on the house, so the consequence of not repaying it is not a collection call — it is the sale of the property. Every private borrower should know the mechanism before signing, not after a missed payment, and the mechanism is not the same across the country. Ontario is a power-of-sale province, and unlike a court process the timetable is set by statute and runs quickly. The Mortgages Act is specific: notice of exercising the power of sale cannot be given until the default has continued at least 15 days, and the sale cannot be made for at least 35 days after that notice is given. Read together that is roughly 50 days from the first missed payment to a lender that is legally able to sell your Brantford home — and the clock does not pause because a refinance is "almost done". You can redeem by paying the arrears and the lender's costs up to the moment of sale, which is the window we use, and it is far shorter than most borrowers imagine. One point holds everywhere and is the one most often misunderstood: where the property is SOLD and the proceeds do not clear the debt, the lender can generally pursue you for the shortfall. It is only where a lender takes title outright that the debt and the house go together — which is exactly why, in provinces that allow a sale without one, lenders sell.

A private lender is lending against the appraised value of a specific property, so the property decides more of this file than your income does. Three things routinely cut the amount available on a Brantford file below what the arithmetic above suggests. First, the appraisal: private appraisals are frequently ordered on an "as-is" or a quick-sale basis rather than at a listing price, because the lender is pricing what it could recover in a hurry, and that figure can land well under what a realtor would list at. Second, condominiums: the status certificate and the reserve-fund study are read closely, and a building with a thin reserve, a special assessment in progress, ongoing litigation or a high rental ratio will see either a lower loan-to-value or a decline — the lender is not underwriting your unit alone, it is underwriting the corporation behind it. Third, marketability: acreage, wells and septic systems, unusual construction, former grow-ops, and properties on leased land all narrow the pool of buyers, and a lender that has to sell into a narrow pool lends less against it. None of these is a reason not to ask. All of them are reasons to have the property looked at before you plan around a number.

A private mortgage is a bridge and the only version of it that goes wrong is the one with no far bank. So we date the exit before placing the file, and we name which of the two it is: a sale, or a refinance you have already established you will qualify for. Then we work backwards. The refinance route needs the qualifying obstacle removed by a specific month — the credit rebuilt, the tax arrears cleared, the two years of self-employed filings in hand — and we set the check-in against that date, not against the maturity date. The three failures are always the same. One: the term is too short for the fix, so a 12-month term is written against a problem that needs eighteen, and the renewal fee arrives instead of the exit. Two: nothing changed, because the plan was "rates will come down" rather than something the borrower controls. Three: the exit was a sale that never got listed, which is the one that ends in the process described above. If we cannot see which of the two exits applies to you, that is not a reason to shorten the term — it is a reason to say so before you pay for an appraisal.

Private money comes from two places and they behave differently at the two moments that matter — funding, and default. A Mortgage Investment Corporation is a pooled, managed fund: more institutional, more predictable, with published lending criteria, a funding process that does not depend on one person's cash position, and a servicing department that handles a missed payment as a process rather than as a personal disappointment. An individual lender can be faster, can be more flexible on an unusual property, and can occasionally be cheaper — and carries the risk that the money is not there on closing day, or that a renewal depends on that person's circumstances a year from now rather than on your file. For a Brantford borrower whose whole plan rests on the deal actually funding on the date it says, that difference is worth more than a quarter point of rate, and we will tell you which one you are being offered. Both are legitimate. Only one of them is a fund.

We place these, and we still turn some away, because the cost only makes sense against a specific alternative. If the problem is a rate you do not like, this is not the product — the all-in cost above is several times a B-lender premium. If the problem is unsecured debt that a consumer proposal would settle for less than the interest here, talk to a licensed insolvency trustee first and we will say so. If there is no exit — no sale, no qualifying event, no date — a private mortgage converts an income problem into a secured one, and the security is your home. If the equity is not really there, because the appraisal will come in under the listing-price arithmetic, the file will stall after you have paid for the appraisal. And if the amount needed is small relative to the fixed costs, the $2,500 of legals and appraisal plus the lender fee can exceed the interest — at which point the effective rate stops resembling the quoted one entirely. The right question is never "can I get one". It is "what does this cost, against what, and how does it end".