How Do I Find a Private Mortgage Lender?

August 23, 2021 | Posted by: Ron Chan

How Do I Find a Private Mortgage Lender Winnipeg

You’ve done some homework and decided that you’d like to avoid the big banks and talk with a private mortgage lender. This can be a great option for buyers, especially those limited established credit (but otherwise sound financials) or anyone who wants to explore all options before making a major life decision. However, private lenders are not as visible as traditional banks. You rarely see their ads on the sides of bus stops nor other outdoor signage. How do you find a private mortgage lender in the greater Winnipeg area? Below is a succinct breakdown of what you need to know.

What Home Buyers Need to Know About Finding a Private Mortgage Lender in the Greater Winnipeg Area

What to Avoid

Private lenders don’t accept deposits. Therefore, they aren’t subject to the same governing law as banks and credit unions. This is what makes them able to make riskier loans. While that’s a benefit for buyers impacted by low credit scores and/or Canada’s mortgage rules, it also creates more risk as a borrower. For instance, many private lenders are quick to foreclose on a home if a borrower falls behind on payments. Look no further than the events of 2020-21 as an example of how that can be a problem. The government can issue mortgage deferrals and prevent banks from calling in a loan, whereas this cannot be enforced upon private lenders. This is just one example of many scenarios that can add to your level of risk.

It may look like we’re trying to talk you out of an alternative lending situation here - but we’re not. A private loan can be a tremendous help, but you do need to carefully vet which one’s you enter a relationship with. For this reason, we encourage you to avoid aggressive private lending individuals and institutions. If you’ve heard about them because they’ve solicited you in any way, take a step back before responding. Aggressive marketing on their behalf often equates equally aggressive terms (high interest rates) and even more aggressive demands for payments. So how to you find a private lender when you should avoid those who solicit your business? Keep reading.

Always Use a Mortgage Broker When Considering a Private Lender

You know that the primary reason to use a mortgage broker is to have someone go to bat for you with the big banks. Well, the exact same is true when it comes to finding and negotiating with private lenders. A reputable mortgage broker not only has relationships with the banks, but with trusted private lenders too. Your broker will have already vetted them regarding interest rates and other loan terms, and will know if a given lender is appropriate to your specific needs. Better yet, they will know exactly which ones to avoid. A mortgage broker will also uncover whether or not going after a private loan is indeed the route you should choose, and can present more favorable alternatives should that be the wiser route. 

Again, a private mortgage may be a great option, but given that there is more risk involved you do need to have a partner at your side to hedge risk and ensure you’re protected. If you’re looking for a mortgage in the greater Winnipeg area, contact Ron Chan today for a FREE consultation. Call 204.290.9950 or email me at ronchan@invis.ca.


Another article you may be interested in:

What are private mortgage lenders?

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