Private First/Second Mortgages

Private First or Second mortgages are used when you own a home and have bruised credit, difficulty proving your income and have run into difficulty paying your bills and you need to consolidate your debt to get creditors off your back, pay tax arrears or put your first mortgage back in good standing.

If you are in a position where you are considering consumer proposal or bankruptcy, and you have equity in your home, call us today and we can help you make the right choice and help you get back on track.

How does a private second mortgage work?

A second mortgage is essentially the same as a first mortgage, however it is placed in second position behind the first mortgage. What that means is, if there is a problem in payment and the home is sold, the first mortgagee is paid from the proceeds first, then the second mortgagee with what is remaining. Should there be enough equity remaining after that, the owner would receive the remainder. Second mortgages are more risky because of this and therefore have higher interest rates to offset the risk.

Second mortgages are registered on title on the property behind the first mortgage holder. Payments are typically made as interest only payments and typically last for one year. This can be longer or shorter depending on the situation and the willingness of the lender.

How much does it cost to get a private mortgage?

The cost is dependent on the size of the mortgage, you can expect to pay a fee to the lender, mortgage broker, appraiser and lawyer. It is extremely important to understand the costs of borrowing for a private mortgage as not all brokerages are reasonable with their fees.

If you are considering a private first or second mortgage, please ensure you pay close attention to the fees set out in the commitment should there ever be a default in payment. Our goal is to help you get out of your financial difficulties and back to where you where before. We will create a plan with you and follow up to help keep you on track.