Private Mortgages in
Taking a private mortgage
on your Richmond Hill home is a big choice, and when done wisely it can come
with great financial benefits. But a private mortgage can be used for more than
the first mortgage on a home. Considering a private mortgage as a second mortgage
is a great choice, and can help ease serious financial tension.
What is a Second Mortgage?
A second mortgage is simply another loan taken out on the value of the home.
Second mortgages do not replace the first mortgage taken out on the home; rather,
they both exist at the same time. Many people take out second mortgages for
financial expenses they cannot afford otherwise, like house repairs or
Often, people prefer to take out a second mortgage rather than using a line of
credit or credit cards as a way to access money they do not have. Lines of
credit are usually provided through a bank, a place where mortgages also
originate. Though lines of credit can be a strong financial choice for many,
they do not always offer the same large sums of money as second mortgages do.
Similarly, credit cards have many restrictions that second mortgages do not.
With strict maximums and high interest rates, credit cards can be too limiting
for those who need the high amounts of money that second mortgages can offer.
Unless someone is financially well off enough to be offered a limitless credit
card, they are not always the best choice.
Private Mortgages as a Second Mortgage
Taking out a second mortgage through a traditional Canadian bank can be a
difficult and stressful process. Banks do not make it easy to borrow money
without high interest and penalties, especially when one loan is already taken
out. Banks can also monitor the finances going in and out of accounts, and take
this money into consideration when giving a second mortgage.
Private mortgage companies offer mortgages of a significant size with very
little investigation into your credit score or bank statements. These mortgages
can be short term or long term, which means that if the loan is only being used
for a small project that can be paid back quickly, you will not be tied into a
long contract. The interest rates on private mortgages can be significantly
lower than that of the competition, be it lines of credit or credit cards.
Because the mortgage does not have to be long term, borrowers do not have to
worry about the loan existing on their credit score even after it has been paid
Taking out a private mortgage as a second mortgage on your Richmond Hill home
can be a great choice. Not only are they more financially practical than lines
of credit and credit cards, they are also not attached to a traditional bank.
The loan can quickly be added and paid back, and will not be tied to someone’s
name long after it is paid back. Private mortgages can be a great way for
Richmond Hill homeowners to improve a poor credit score, and when used
carefully, can be a strong financial choice.