Your visual guide
A private mortgage needs an exit, not just an approval
Treat private financing as a short bridge. Know why it is needed, the full cost and how it will be repaid.
Need
Define the problem
Timing, credit, income, property or urgent capital.
Pause before the next stage if a requirement is unresolved.
Details vary by borrower, property, program and lender. This visual organizes the conversation; it does not determine eligibility.
How the decision works
Evaluate private financing in this order
- 01
Debt coverage
Can required payments be carried during the term?
- 02
Exit strategy
What specific event repays the private mortgage?
- 03
LTV / CLTV
How much total debt sits against defensible property value?
- 04
Borrower story
Why is the bridge needed and what changes next?
Evidence stack
See the complete cost stack
Decision path
The exit must be a real event
Path 1
Refinance
Income, credit or property changes support a new lender.
Stop gates
Resolve these before relying on the plan
These visuals organize questions for your professional team. They are not an approval, legal opinion or personalized recommendation.
Detailed guide
Overview
Private mortgages have a reputation problem. Many people think they are a last resort for desperate borrowers. The truth is more nuanced — in many situations, a private mortgage is the smartest financial move you can make.
Let us break down exactly when private lending makes sense, what it costs, and how we use it as a strategic tool at Echelon7 Mortgages.
What Is a Private Mortgage?
A private mortgage is a loan from a non-institutional lender — an individual investor or a private lending company — secured against your property. Unlike banks, private lenders focus primarily on the property value and your equity position rather than your income documentation or credit score.
When Private Lending Makes Sense
Here are the most common scenarios where we recommend private mortgages to our BC clients:
- Bridge financing: You need to close on your new home before your current one sells. A 3-6 month private loan bridges the gap.
- Credit rebuilding: After a consumer proposal or bankruptcy, you need 2 years to qualify with a traditional lender. A private mortgage lets you buy now and refinance later.
- Quick closing: The deal needs to close in 5-10 days and no bank can move that fast.
- Construction or renovation: You need funds to complete a major renovation before refinancing.
- Self-employed with complex income: When even alternative lender programs cannot work, a private first mortgage can be the entry point.
- Debt consolidation urgency: High-interest debts need to be paid off immediately to stop the bleeding.
What It Costs
Private mortgage pricing, lender fees, and term length vary with the property, location, leverage, mortgage position, borrower profile, and exit strategy. Obtain a written cost-of-borrowing disclosure and compare the total cost before proceeding.
A private mortgage should have a realistic exit strategy. Transitioning to another lender is not guaranteed and requires the borrower and property to qualify at that future date.
When Private Lending Does NOT Make Sense
We will be honest: private mortgages are wrong for some situations.
- If you cannot realistically improve your situation within 12 months.
- If you are already overleveraged and adding more debt will not solve the problem.
- If the property does not have enough equity to protect you (and the lender).
- If a B-lender alternative is available at a much lower rate.
Our Approach
At Echelon7 Mortgages, we have access to a network of vetted private lenders across BC. Every private deal we structure includes a written exit plan — how and when we will move you to a better rate. Contact us for a free assessment of your options.