Private mortgages are generally interest only, short-term loans. They are typically 1-3 years in length.

Private lenders are typically investors or investor pools that understand that conventional lending guidelines from Banks and Credit Unions are very strict and that borrowers do have the ability to pay back more than what a traditional lending institution will allow.

Private lenders are more concerned about the property in general, location, appearance and overall condition. The more equity a borrower can offer, the happier the private lender will be.

Why would I use a private mortgage lender?

You would use a private mortgage in the following situations:

You are currently facing foreclosure or bankruptcy
You are self-employed without a 2 year history of business.
You want to purchase or build an unconventional home.
You need your mortgage approval very quickly.
Your bad credit history means you are being turned down by lenders.
You only need a short term loan.
You have nonconfirmable income that is preventing you from obtaining a traditional mortgage.

Characteristics of a private mortgage:

Interest rates 5.99% -18%
Private mortgage rates are the highest when compared to prime lenders and bad credit lenders and should be used as a last resort.
Fees are generally 2%-5% with a minimum of $2500.00 This included broker and lender fees.
Terms available 1-35 years
2nd Mortgages Available
Typically used as a bandaid solution to a short term problem.

Private lenders will often specialize or be an expert in specialized categories.


Private mortgage lenders want their clients to be able to transfer on to a prime lender within a year to 18 months. They deal in fast financing and therefore need to be able to collect their return on investment within the specified time. Private lenders are typically looking to give their clients a boost and transfer them to a mainstream lender as fast as they can.

The Mainstream Team can help connect you to the right private mortgage lender. With a private lender, the broker’s commission isn’t included in the loan amount, so your broker will charge you a small upfront fee. Despite the charge, it may be worth it to find a lender who can provide you with the lowest mortgage rate for your financial needs.

Contact us today to see if Private Mortgage Lending is right for you!