What Are Private Mortgage Rates?
Private mortgage rates in BC come from lenders in the alternative, home equity or non-conforming mortgage market. Mortgage Rates from these types of private mortgage lenders are higher than conventional mortgage rates due to the degree of risk in the client’s application.
What Are Private Mortgages For?
You can borrow money for things like debt consolidation, home renovations, Pre-sales, business capital, Self employed, outstanding taxes, education and much more. It is a good idea when borrowing money at a higher rate of interest to make sure you are using the funds to better your situation so that you are able to go back to a bank in a few years.
2nd Mortgage Private Mortgage Rates
Private mortgage rates on 2nd mortgages vary depending on the amount of home equity you have and the location of your property. Although these private mortgage rates are higher than conventional 1st mortgages they can be used to consolidate high interest credit cards debt or do home renovation or anything you want and since they usually are interest only or amortized over 25 years this can considerably lower your monthly payment. It is a good idea to deal with a Mortgage Specialist that has access to a variate of Private Mortgage products that way you can be confident that you have sourced competitive private mortgage rates and products. (check out our recently added blog regarding Examples of Private Mortgages)
What to Consider | Private Mortgage Rates BC
When looking for a private mortgage rate, consider all the costs involved. Some lenders offer low introductory rates but yield the rate up with a lender fee. Some lenders have high payout penalties and some other lenders offer a percentage of the total amount of the mortgage to renew. All these can affect your true cost to borrow when looking for First & Second private mortgage rates.
Another example; a payout penalty of 4 months for early payout. This could add another 4% annually to your cost of borrowing.
And again look at your renewal fee. Some private lenders have a onetime fixed fee, yet others charge a 1% or 2% of the loan amount to renew. These can effectively change the rate of borrowing in the next year of your term.