We’ve talked a lot here about how private mortgages work, but it’s time to start talking about WHY they work. Like always you’ll want to speak with one of our Canada mortgage brokers to make sure that this is the best route for you. While they are different, they’re virtually identical to every other sort of mortgage – you’re just dealing with a private lender instead of a bank or government organisation. Like mentioned earlier, everyone is different and you should do your research and talk to use first.
30 Year Mortgages are Out
With the last major changes made to the mortgage rules last year, 30 year mortgages are out. The max amortization rate for any kind of mortgage, including private mortgages, is now 25 years. While this will raise your payments a little you’ll be able to avoid a debt bubble. Any Canada mortgage broker can tell you that the longer your mortgage runs the more time you’ll have for something to go horribly wrong.
Private Mortgages Have Less Default Risk
Private mortgages year after year have been shown to have a much lower risk of default than other kinds of mortgages. Why is that though? Is there some dark magic at play or just better terms? Like all loans you’ll have to be careful about who you work with and what your mortgage terms are. When you work with us as your Toronto mortgage broker we’ll be able to work through your contract and understand if you’re getting a good deal or not. It’s only a lower default risk if you’re getting a deal that’s right for you.
Lower Interest Rates are the Norm
Most borrowers will see their interest rates drop a few percent when they pick a private lender, but some can see even larger jumps. It really depends on where you’re starting at – if you’re a higher credit risk or have a history of bad credit you could run into trouble. That’s exactly why you will want to work with us as your mortgage broker; no one should have to pay more than they have to and we’ll go over every aspect to help you make the most of your terms. Don’t get stuck with a bad deal when you can get the one that’s right for you.
Better Repayment Terms
Private mortgages feature better repayment terms. Most borrowers will see fewer punitive terms like early repayment penalties and late payment penalties with some interest forgiveness thrown into the mix. But everyone is different and each lender is going to offer you as a borrower a different kind of deal. That’s why it’s so important that you don’t do it on your own.
When looking for the right mortgage you need the right help. We’ll be able to help pair you with a lender that not only offers you a good deal now but a good deal later. We’ll make sure that you don’t just get a good teaser rate – you’ll get a mortgage you can live with. Visit our private mortgage page to learn more!