Private mortgages can help when a bank says no or when time is tight. In British Columbia, these loans are often built around the property and the exit plan, not only income documents. That difference is why approvals can feel faster and terms can be more flexible.
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What “private” usually means
A private mortgage is funded by a non-bank lender. It may be an individual, a group of investors, or a private lending company. The loan is still registered against your property, like other mortgages.
Private lenders often focus first on collateral. They care about value, marketability, and location. Your credit and income still matter, but they may be secondary in the decision.
Why approvals can move quickly
Private lending often uses simpler underwriting. The process tends to center on a current valuation, the requested loan amount, and the repayment timeline. You may still provide income and credit details, but the file can move with fewer conditions.
Faster does not mean casual. Expect questions about how you will repay the loan at the end of the term.
What “flexible terms” looks like
Flexibility can show up in several ways.
- Credit and income exceptions. Private lenders may lend when credit is bruised or income is variable.
- Short-term bridges. Some loans cover a gap while you fix an issue or wait for a future event.
- Equity-based approvals. A lender may approve based on equity even when ratios are high.
Private loans are often short term, which can create pressure at renewal if you do not have a clear exit strategy.
Fees and documents to expect
Private mortgages can include lender fees and broker fees. They also require legal work to register the mortgage and finalize documents. Ask for the full cost picture early.
You should also expect an appraisal or other valuation method. This helps define risk for both sides.
The broker’s role in a private deal
A good broker helps you compare options, confirm the true cost, and test the exit plan. In BC, people and companies that engage in mortgage broker activities must be registered with the regulator.
For a plain language overview of the rules, see the BC Financial Services Authority guide:
Mortgage brokers in BC. Working with a mortgage broker BC homeowners can rely on can also reduce the risk of picking the wrong product.
Common reasons borrowers use private lenders
Private mortgages are often used for a purchase with a tight closing date, a refinance that does not fit bank guidelines, or a transition period like self employment changes. They can also help when a property is harder to finance through a traditional lender.
If you are exploring private mortgage lenders, treat the loan as a plan with steps. Better outcomes happen when the loan solves a short-term need and you know what comes next.
Where refinance fits
A private mortgage is sometimes used as a reset. You might use it to consolidate obligations while you stabilize cash flow. The key is to avoid getting stuck in repeated short renewals.
If your goal is long-term affordability, plan for a follow-on mortgage refinance once the issues that blocked bank financing are resolved.
Get clarity before you commit
Want faster answers without guessing the real cost? Talk with Your Equity Mortgage about your timeline, your equity, and your exit plan. Review options, compare terms, and map a path back to traditional financing when it makes sense.