Private Mortgages in North York

Key Takeaways:

• 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 comes with a defined exit plan to institutional lending
• First and second positions available — private lending covers the full spectrum of North York property financing needs

When Private Lending Makes Sense

Private mortgages fill the gap when institutional lenders can’t act quickly enough or can’t approve due to credit, income, or property challenges. Common North York situations: a homeowner facing power of sale who needs emergency funding in days; a self-employed borrower who earns well but reports modest taxable income; a buyer with a recent consumer proposal who wants to purchase before the standard B lender waiting period expires; a property with characteristics that make banks uncomfortable; a transaction that needs to close in 2 weeks rather than 6. Private lending solves these situations.

How Private Mortgages Work

Private lenders are individuals and funds that lend against real estate equity rather than through the institutional mortgage system. Their approval process is simpler: they evaluate the property’s appraised value, the requested LTV ratio, and a basic assessment of the borrower’s situation. Credit history is considered but is not the primary driver. The result is faster approval and funding — often 3-7 business days — at a higher cost than institutional lending.

Private First vs. Private Second

Rates, Fees, and Full Cost

Private mortgage rates in Ontario typically range from 7%-12% annually, with most North York residential transactions in the 8%-10% range. Lender fees are 2-4% of the mortgage amount paid at closing from the mortgage proceeds. Legal fees (both lender’s and borrower’s) and appraisal costs are additional. CMS provides a full cost disclosure before you commit — including total cost to close and projected annual payment — so there are no surprises.

The Exit Strategy

Every private mortgage CMS arranges comes with a defined exit plan. The private mortgage is a bridge — its job is to solve today’s problem while setting you up to access better financing at the end of the term. The exit strategy is specific to your situation: building credit to B lender qualification over 12 months, stabilizing income documentation for A lender programs, completing the post-insolvency waiting period, or using the term to sell the property at full market value. We review progress at the 6-month mark so there are no surprises at renewal.

Common North York Scenarios

Power of sale emergency: A Willowdale homeowner 60 days behind on payments receives a Notice of Sale. CMS arranges a private first mortgage to pay out the existing lender, stopping the process. Exit plan: 12-month private term, rebuild credit, B lender at renewal. Self-employed purchase: A Bayview Village buyer operates an incorporated business with strong revenue but modest T1 income. A lenders won’t approve. Private funding covers the purchase. Exit plan: transition to B lender stated-income program at the one-year renewal. Post-proposal purchase: A client 18 months out of a completed consumer proposal has rebuilt two credit trade lines but hasn’t reached the B lender 2-year mark. Private funding enables the purchase now; at the 1-year renewal with 2.5 years post-proposal completed, the client transitions to B lender at much better terms. Call 905-455-5005 to discuss your situation.