Mortgage services · 07
Private & alternative lending
When a bank says no, your file is not dead. Behind the banks sits a second market that prices risk instead of refusing it. It is faster, more flexible, and more expensive — and it works best when it is temporary.
Speed
Private funds can move in days, not weeks.
The real cost
Higher rates plus fees, always disclosed in writing before you sign.
The rule
Every file comes with a written exit plan back to normal lending.
The basics
What this market is
Canada has three layers of mortgage lending:
- Banks and regular lenders. Best rates, strictest rules.
- Alternative lenders. Regulated companies with flexible rules — for bruised credit, unusual income, or files that need a story read, not a box ticked.
- Private lenders. Individuals and funds who lend mainly against your equity — the part of your home you own. They barely look at your credit score. They look at the property and your exit plan.
In Ontario, arranging any of this must go through a licensed brokerage — this one is Real Mortgage Associates, #10464 — with every cost disclosed in writing before you sign. Nobody should discover a fee at the lawyer's office. With me, nobody does.
No soft focus
What it costs, honestly
Plain numbers, before anything else:
- Private first mortgages in Ontario usually price in the high single digits and up. Second mortgages run higher.
- Lender and broker fees on private deals commonly total 2–4%, disclosed in writing.
- Terms are short — usually one year, interest-only.
The decision is always the same comparison: the cost of the money versus the cost of the problem it solves.
What this means for you — an example
A $400,000 private mortgage at a 4% premium costs about $16,000 a year more than bank pricing.
Against losing a $60,000 deposit or letting a tax debt compound — clearly worth it. Against mild impatience or a rate you simply dislike — clearly not. I put both numbers side by side and let the arithmetic decide. 'No mortgage' is a recommendation I give regularly.
The right reasons
When private money is the right call
- The clock beats the rate. A closing in ten days, a tax deadline, an estate to settle. Private funds move in days because they check the equity, not your life story.
- Your file needs a season to heal. Credit rebuilding after a rough year, income paperwork catching up to reality. A one-year term holds the fort while the file recovers.
- The property is unusual. Mid-renovation houses, land, structures a bank's software has no box for. Equity lenders read the asset directly.
And the exit rule, always: we write down what changes (taxes paid, credit healed, income documented), by when, and which normal refinance it unlocks. I calendar the file and start the move back to cheaper lending months before the term ends. Private lending as a bridge is a tool. Private lending as a habit is a leak.
The rule I do not bend
Your exit plan, written down
Private money is a bridge, not a home. Before I place any private mortgage, we write down four things:
- What has to change — taxes paid, credit repaired, income documented, or the property sold.
- By when — a real date, not a hope.
- Which lender comes next — the normal mortgage this plan unlocks.
- Who is watching the calendar — me. I start the exit refinance months before your term ends.
If we cannot write a believable exit plan, that is a strong sign the private mortgage is the wrong answer — and I will say so.
What this means for you
Ask any lender or broker offering you private money: “What is my exit, and when?”
If they do not have a clear answer in writing, keep looking. A one-year loan with no plan for year two is how people get stuck paying high rates for a decade.
Common questions
Questions people ask
Short answers in plain English. Your situation may be different — ask me anything on a free call.
Is private lending legal and safe?
The lending itself is legal and long-established. In Ontario it must be arranged through a licensed brokerage, with all costs and conflicts disclosed in writing. The real risks are borrowing too much against your equity and rolling short terms forever — the written exit plan exists to prevent both.
Why not just wait for a bank to say yes?
Sometimes the bank's yes arrives too late — the deposit is gone, the penalties compounded, the deal died. Private money buys time. If time is not actually the problem, then waiting is right, and I will say so.
What happens at the end of the one-year term?
Three doors: refinance with a normal lender (the plan), renew with the private lender for another term (acceptable if real progress was made), or sell. The bad outcome — surprise renewal fees on a file that made no progress — is what the exit calendar prevents.
Do you charge a fee on these files?
On private and some alternative placements, yes — my compensation comes from a disclosed fee instead of a lender commission. It appears in the commitment documents in plain dollars. If the total cost of the deal doesn't beat the cost of the problem, I would rather keep your trust than the fee.
How much can I borrow with a private mortgage?
Private lenders work from your equity, not your income. Most will lend up to about 75% of the property's value in total, counting any mortgage already on it. So a $800,000 home with a $400,000 first mortgage might support roughly $200,000 more. The property's location and how easily it could be sold both affect the limit.
Bring the file the bank flinched at
'Declined' is one desk's opinion, not the market's. Tell me the situation and the deadline — I will tell you the real options and the real costs.