Private Mortgage Lenders in London, Ontario

What a private mortgage lender actually cares about

Unlike banks and monoline lenders, private lenders focus primarily on the property and the equity cushion, not your credit score or tax-return income. The key question is: if the loan goes into default, can the property be sold for enough to recover the loan? That means loan-to-value, property type, location and marketability matter more than bruised credit, recent job changes or non-traditional income.

• Loan-to-value generally capped at 75% to 85% of a current appraised value
• Property condition, location and resale marketability in London and surrounding areas
• A realistic, documented exit strategy back to a prime or alternative lender
• Sufficient income to service the monthly interest payment, even if tax returns do not show it

When private lending is the right move

Private mortgages are expensive, so they should only be used when they solve a problem that is more costly than the loan itself. Common situations in the London market include:

• Stopping a power-of-sale or foreclosure with a tight closing deadline
• Consolidating Canada Revenue Agency debt or high-interest balances that are threatening the property
• Bridging a gap while a divorce settlement, estate distribution or business sale finalizes
• Financing a property that does not yet qualify for prime insurance, such as some rural or non-conforming homes near London
• A short-term hold while credit is repaired or two years of self-employed income is established

How the costs work

Private mortgages carry higher rates than prime or most alternative lenders, plus lender fees and often broker fees. These fees are disclosed in writing before you commit. The honest way to evaluate the cost is against the alternative: the interest and penalties you are already paying, the equity you are at risk of losing, or the opportunity you cannot access without the loan.

Terms are usually six months to two years. Interest-only payments are common, which keeps the monthly obligation lower but means the principal balance does not decline unless you choose to pay it down.

The plan to get back to prime

Every private mortgage should come with an exit plan. In most London files that means:

• Repairing credit: paying every obligation on time and keeping revolving balances below roughly 30% of limits
• Resolving collections, judgments or CRA arrears that are blocking prime approval
• Documenting income consistently for the period the target lender requires
• Refinancing or switching to a prime or alternative lender at the end of the private term

How I approach private lending files

I do not lead with private lending. My first step is always to see whether an alternative (B) lender or a bank solution can work, because the cost is usually lower. If private is genuinely the best or only path, I explain the full cost structure, the risks, the timeline, and the exact steps needed to move back to prime financing at renewal.