The main reason you may consider private mortgage is, you don’t qualify with the traditional lenders like banks, Credit Unions, Trust Companies. They need a lot of documentation and even if you are more than able to make the payments, they still want you to qualify according to their lending guidelines. You are also expected to have good credit history as well. On the other hand, private mortgage is based on equity in the property. Approval is not based on credit and/or income but your ability to make the payments. In case you have a bad credit but score is over 500 and also have stable steady verifiable income.

You would use a private mortgage lender under any of the following circumstances:

• You want to purchase a property that traditional lenders won’t lend against.
• You need fast financing and don’t want to wait for a long approval process.
• You want to do some home improvements but banks will not lend you because there is not enough equity in the property.
• You have a bad credit or unverifiable income.
• You want to use your home equity to pay off high interest rate loans.
• You only need a short term loan.
• You are in a foreclosure or consumer proposal.
• You declared bankruptcy.
• Construction Financing.