Not every borrower fits traditional bank lending guidelines.

A private mortgage can provide an alternative financing solution when conventional mortgage options aren't available or when you need a short-term solution for a specific financial situation.

At SGD Mortgages, we'll review your circumstances, explore available lending options, and help you determine whether private financing is the right path for you.

What Is a Private Mortgage?

A private mortgage is a loan secured against real estate and funded by a private lender rather than a traditional bank or credit union.

Private lenders can include:

• Individuals

• Private lending companies

• Mortgage Investment Corporations (MICs)

Private lenders may place greater emphasis on the property and available equity than traditional lenders, although your overall financial situation and ability to meet the mortgage obligations still matter.

Private mortgages can also have more flexible lending criteria than traditional bank mortgages.

When Could a Private Mortgage Make Sense?

Private financing may be considered when traditional financing isn't available or doesn't fit your current circumstances.

Credit Challenges

Past credit issues don't necessarily mean there are no mortgage options available. A private lender may consider factors beyond your credit score, including your property's value and available equity.

Self-Employed or Non-Traditional Income

Business owners and borrowers with income that is difficult to document using traditional bank requirements may have alternative lending options.

Bank Decline

Being declined by one bank doesn't necessarily mean you've reached the end of your mortgage options.

Short-Term Financial Challenges

Private financing may provide temporary financing while you work toward improving credit, stabilizing income, reducing debt, or qualifying for traditional financing.

Debt Consolidation

Eligible homeowners may be able to use available home equity to consolidate higher-interest debts into a structured financing solution.

Time-Sensitive Financing

Private lenders may sometimes have different underwriting processes than traditional financial institutions, which can be useful when financing is time-sensitive.

Private Mortgages Are Designed to Be Short-Term

This is one of the most important things to understand about private financing.

Private mortgages are generally intended as a temporary solution, often for a term of approximately one or two years.

The goal shouldn't simply be to get approved today.

There should also be a realistic plan for what happens when the private mortgage ends.

Your Exit Strategy Matters

Before entering a private mortgage, it's important to have a realistic plan for transitioning out of private financing.

Your exit strategy could include:

Improve Your Credit

Use the private mortgage term to rebuild your credit so you can potentially qualify for lower-cost financing later.

Stabilize or Document Your Income

For self-employed or non-traditional borrowers, additional time may help establish the income documentation required by another lender.

Reduce Your Debt

Improving your overall financial position may help you qualify for traditional or alternative financing when the private mortgage matures.

Refinance With Another Lender

Once your financial circumstances improve, the goal may be to transition into a more affordable mortgage solution.

Sell the Property

In some situations, selling the property may form part of the exit strategy, provided the plan is realistic and there is sufficient equity.

At SGD Mortgages, we'll consider both the financing you need today and your realistic path forward.

How Are Private Mortgages Different From Bank Mortgages?

More Flexible Qualification

Banks typically have standardized income, credit, debt-service and underwriting requirements.

Private lenders may have more flexibility and can place greater emphasis on the value and equity of the property.

Shorter Terms

Private mortgages commonly have shorter terms than traditional mortgages and are generally intended as temporary financing.

Higher Borrowing Costs

The flexibility comes at a cost.

Private mortgages typically have higher interest rates and fees than traditional mortgages.

Interest-Only Payments May Apply

Some private mortgages are structured with interest-only payments.

This can reduce the required monthly payment, but it also means your payments may not reduce the principal balance during the term.

Terms vary by lender and mortgage.

Understand the Full Cost

Before choosing private financing, it's important to understand more than just the interest rate.

Depending on the mortgage, costs may include:

• Interest

• Lender fees

• Brokerage fees, where applicable

• Legal fees

• Appraisal costs

• Administration fees

• Renewal fees

• Late-payment fees

• Discharge or early-exit costs

We'll walk you through the applicable costs and mortgage terms before you make a decision.

What Will a Private Lender Consider?

Requirements vary by lender, but a private mortgage assessment may consider:

Property Value
The lender will consider the value and marketability of the property securing the mortgage.

Available Equity
Your existing mortgage and other debts registered against the property affect how much financing may be available.

Loan-to-Value (LTV)
The requested mortgage amount compared with the property's value is an important part of the lending decision.

Income & Financial Situation
Although private lenders may have more flexible income requirements, your ability to manage the financing remains important.

Credit History
Credit challenges may be considered differently than at a traditional bank, but credit can still affect the available terms and options.

Exit Strategy
The lender and mortgage professional will want to understand how you realistically plan to repay or transition out of the private mortgage at maturity.

Why Work With SGD Mortgages?

We Look Beyond One Bank

A bank decline doesn't necessarily mean there are no other financing options.

We can review traditional, alternative, and private mortgage solutions to determine which options may fit your situation.

We Look at the Whole Picture

Your credit score is only one part of your financial story.

We'll review your property, available equity, income, debts, goals, and circumstances before exploring suitable options.

We Explain the Costs Upfront

Private financing can be more expensive than traditional lending. We'll help you understand the rate, fees, payment structure, mortgage term, and other important conditions before proceeding.

We Help Build an Exit Strategy

Getting the mortgage is only part of the plan.

We'll discuss what needs to happen during the term so you have a realistic path toward more affordable financing or another appropriate exit when the private mortgage matures.

Guidance From Application to Closing

We'll help you understand the documentation, lender requirements, appraisal, legal process, and next steps throughout your mortgage application.

Bank Said No? Let's Look at Your Other Options.

A traditional bank decline doesn't automatically mean your financing journey is over.

Private financing may provide a short-term solution while you work toward your longer-term financial goals.

Talk to SGD Mortgages and let us review your situation, explain the available options, and help you determine the right next step.