There are many items that need to be known when applying for a private mortgage, these are the most important items when it comes to private borrowing.
1. Legal requirements:
Private mortgages in Ontario are governed by the Mortgage Brokers Act, which outlines the legal requirements for private mortgage lending, including licensing, disclosure, and record-keeping.
2. Interest rates:
Private mortgages typically have higher interest rates than traditional mortgages, as they are considered riskier investments. Be sure to understand the terms of the loan, including the interest rate, before entering into the agreement.
3. Repayment terms:
Private mortgages typically have shorter repayment terms than traditional mortgages. Be sure to understand the terms of the loan, including the repayment schedule, before entering into the agreement.
4. Security:
Private mortgages are secured by the property being financed. Be sure to understand the terms of the loan, including the amount of the loan, the value of the property, and the loan-to-value ratio, before entering into the agreement.
5. Default:
If the borrower defaults on the loan, the lender has the right to enforce power of sale proceedings. Understand the consequences of default before entering into the agreement, and make sure you can afford the mortgage payments before taking on the private mortgage.
