• Equity-based approval — private lenders weigh your property’s value, not your credit score
• Fast closing — private mortgages can fund in 3–7 business days for urgent situations
• Bridge, not destination — every CMS private mortgage includes a defined exit plan
• Burlington’s premium property values make it attractive security — often resulting in better private terms

When Private Lending Makes Sense in Burlington

Private mortgages fill the gap when institutional lenders — both A and B tier — cannot act quickly enough or cannot approve the deal.

Credit is severely damaged. A Burlington homeowner with a score below 500, active collections, or a very recent consumer proposal or bankruptcy discharge will not qualify with even flexible B lenders. Private lenders approve based on property equity. If the home has 20 to 25 percent equity, a private lender will consider it regardless of the credit report. In Burlington’s professional community, credit damage often follows divorce, business failure, or medical events rather than chronic overspending — the underlying financial capacity is strong, but the score has not yet recovered.

Income cannot be documented to institutional standards. Burlington has a significant population of self-employed professionals — consultants, incorporated medical and legal practitioners, small business owners, and independent financial advisors. Their income is substantial but does not fit standard bank documentation models. A consultant earning $200,000 through a professional corporation who draws a modest salary may not qualify at a bank. Private lenders require minimal income documentation because the property secures the loan.

Time is critical. Institutional approvals take weeks. Private lenders can approve and fund in three to seven business days. For power of sale situations, court-ordered equalization deadlines, or urgent CRA obligations, that speed is decisive. On Burlington properties worth $900,000 to $1,500,000, the equity at risk in a delayed response can be enormous.

Spousal buyout under pressure. When a separating couple needs to refinance the family home to pay out one partner’s equity share, and the remaining partner’s credit has been damaged during the separation, institutional lenders may decline. A private mortgage funds the buyout, preserves the home for the children, and gives the remaining partner 12 months to rebuild credit and refinance institutionally. CMS coordinates with family law counsel to ensure timelines and financial structures align.

How Private Mortgages Work

Private lenders are individuals and investment funds that lend against real estate equity outside the banking system. Their approval process is simpler: evaluate the property’s appraised value, calculate LTV, review the situation at a high level, and decide — often within 24 to 48 hours.

The process through CMS begins with a phone call. Your broker collects the basic details — property address, estimated value, existing mortgage balance, what you need the funds for, and any relevant background. CMS identifies the right private lender for your situation, an appraisal is ordered, the lender reviews and issues a commitment, and the file goes to a real estate lawyer for closing. Timeline is typically one to two weeks and as little as three to five business days when urgency demands it.

Private mortgages in Ontario are regulated. Brokers must be FSRA-licensed. Terms are documented in a standard commitment letter and registered on title through a real estate lawyer. CMS works exclusively with established, transparent private lenders who disclose all costs upfront.

Private First vs. Private Second

A private first replaces or provides the primary financing when no institutional lender can approve the file. A private second sits behind an institutional first, providing additional funds without disturbing the first’s rate or terms.

In Burlington, private seconds are particularly common. Many homeowners locked in competitive first mortgage rates on balances of $600,000 to $900,000 and now need equity access for consolidation, a spousal buyout, or emergency expenses. Breaking that first would mean losing a rate they cannot replicate. A private second of $50,000 to $100,000 solves the immediate need while preserving the long-term rate advantage. At renewal, the two can be combined into a single institutional mortgage. For more on this comparison, see the first and second mortgages page.

Rates, Fees, and Full Cost

Private rates in Ontario typically range from 7 to 12 percent annually, with most Burlington residential deals in the 8 to 10 percent range. The exact rate depends on LTV, property type, and the borrower’s situation. Lower LTV ratios command better rates because the lender’s risk is reduced — and Burlington’s higher property values naturally produce favourable LTV ratios even on larger mortgage amounts.

Lender fees are two to four percent of the mortgage amount, paid at closing from proceeds. On a $200,000 private mortgage the fee is $4,000 to $8,000. Legal fees and appraisal costs add $2,500 to $4,500. CMS provides complete cost disclosure — total cost to close, monthly payment, projected total interest — before you sign anything.

Burlington properties are highly regarded by private lenders. The city’s lakefront location, GO Transit connectivity, strong school system, and consistent buyer demand make Burlington real estate premium security. Private lenders view a $1,000,000 Burlington home at 70 percent LTV as low-risk — the property will hold value and sell quickly if needed. That lender confidence often translates to rates at the lower end of the private range and a willingness to approve at higher LTV than they might accept in less established markets.

The Exit Strategy

Every CMS private mortgage includes a defined exit plan. Private rates and fees are too high for permanent borrowing — CMS will tell you that directly. The goal is always to transition to institutional lending as quickly as your situation allows.

For credit rebuilding: 12 months of on-time payments, utilization below 30 percent, two active tradelines, transition to B lender at renewal. For self-employed income: 12 to 24 months of bank statement accumulation for a B lender stated-income program. For spousal buyout: stabilize the household budget on a single income, rebuild credit during the private term, and refinance institutionally at renewal. CMS reviews progress at six months and begins the refinancing process early to ensure a seamless transition.

On Burlington’s higher property values, the savings from transitioning to institutional rates are substantial. Moving from a 9 percent private rate to a B lender rate on a $600,000 mortgage saves thousands per year. Moving from B to A saves thousands more. The short-term cost of private lending is an investment that pays for itself many times over once institutional qualification is achieved.

CMS tracks transition progress actively rather than passively. At the six-month mark, your broker reviews credit scores, payment history, and income documentation progress. If the file is on track, the refinancing process begins early — applications are submitted to target lenders two to three months before the private term expires, giving time for approvals, appraisals, and legal work. The goal is a seamless transition with no gap and no need for a costly private renewal. If the file is not on track, CMS identifies what needs to change and adjusts the plan immediately rather than waiting until the term expires and the options narrow.

Common Burlington Scenarios

Divorce and Spousal Buyout

A couple in Tyandaga is separating. The home is worth $1,100,000 with a $600,000 first. The wife wants to keep the home and needs to pay out $200,000 in equalization. Her credit dropped to 540 during the separation due to missed joint payments. A private second mortgage of $200,000 funds the buyout, preserving the home. During the one-year term, she stabilizes finances, makes every payment on time, rebuilds her credit to 600, and CMS transitions the file to a B lender refinance that combines both mortgages at a significantly lower rate.

Professional Income Documentation Gap

A medical specialist incorporated in Burlington earns $350,000 in gross practice revenue but draws a $90,000 salary. He wants to purchase a $1,200,000 home with $300,000 down. The bank declines — salary income cannot support the $900,000 mortgage at GDS/TDS limits. Even B lender programs fall short. A private first mortgage funds the purchase at 75 percent LTV. Exit plan: 12 months of T4 salary increases documented through the corporation, positioning the file for B lender refinancing at renewal with a clear path to A lender within two to three years.

Power of Sale Emergency on the Lakeshore

A homeowner near Lakeshore Road has fallen four months behind after a business closure. The lender issues a Notice of Sale. The property is worth $1,300,000 with a $550,000 first — $750,000 in equity at risk. CMS arranges a private first mortgage within five business days, clearing arrears and stopping the process. The homeowner stabilizes during the one-year term and transitions to institutional lending at renewal. The equity preserved is worth more than the total cost of the private mortgage many times over. Call 905-455-5005 to discuss your situation.