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What is a private mortgage?

A private mortgage is one that is financed by an individual or private corporation. Private mortgages can be first, second and third mortgages.

Private vs. Institutional

Private Lending
  • Financed by an individual or private corporation
  • Flexible qualification requirements - asset focused
  • Faster closing and funding
  • Customizable loan options
Institutional Lending
  • Financed by a bank, credit union or trust company
  • Rigid approval process – stress test, income history and credit score focused
  • Slower closing and funding
  • Strict loan options

What is a second mortgage?

A second mortgage or a home equity loan is an additional loan that is taken on a property that is already mortgaged. In many instances, homeowners do not use the same provider as their first mortgage for second mortgage requests.


Why would someone want a second mortgage?

  • Debt consolidation
  • Home renovations
  • Gift funds to family
  • Purchase a second home
  • Cash flow deficits
  • Investment purchase
  • Capital to start a business

What is the difference between a first and second mortgage?

There is virtually no difference other than a first position mortgage taking priority over the second mortgage. While you must continue to pay both mortgages as per signed repayment schedules, if your house was to be foreclosed or sold, the solicitor would ensure that the first positioned mortgage is paid in full before paying off the second position mortgage.


What is home equity?

Each homeowner will have a different amount of equity. Home equity is the value of an asset less all liabilities associated with that asset.

For example, if your home is worth $500,000 and you have a current mortgage of $200,000 outstanding; your home would have $300,000 in equity. Equity Lending is when a lender provides funds to a borrower strictly based on the subject home’s equity.

Do you want to learn more about Mortgages and Home Equity Loans?

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