1
Approval on equity.
Most private lenders in Metro Vancouver will go to 65–75% of appraised value combined with any mortgage already on title. Income is a secondary check. Credit is read for the story behind it rather than scored.
Private Mortgages · Surrey, BC
Private Mortgages in Surrey
A private mortgage is a loan secured by your home and funded by specialized institutional mortgage lenders, or mortgage investment entities, rather than a bank. In Surrey I use them for short gaps: a decline with a closing date attached, or a year of bruised credit that needs to pass. They're fast and they cost more, so every one I arrange comes with a written way out.
Where It Fits
Where a Private Mortgage Fits
Private lenders underwrite the property first. In Surrey that makes them the right call in a specific set of situations, and the wrong call for most others.
- A bank decline with a completion date you can't move
- A consumer proposal or a divorce year still showing on the bureau
- Income you can't prove on paper yet, such as a first year self-employed
- CRA or property tax arrears the bank won't lend against until they're cleared
- Debt consolidation, rolling cards and lines of credit into one payment secured by the home
- Increasing leverage on an investment property with an equity take-out
- Funding another investment while the equity is sitting idle
- Closing an acquisition that has to complete before conventional financing can be arranged
- Acreage, or a condo under a special assessment, that the banks won't touch
- A few weeks or months to cover before a sale or refinance completes
If a B-lender or your own bank can do the deal, that's where it goes. Private is for when they can't.
The Terms
What a Private Mortgage in Surrey Actually Looks Like
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One year, interest-only, higher cost.
The standard term is twelve months, open or closed. Payments are interest-only. The rate sits above B-lender pricing and there is a lender fee plus a broker fee, both shown in writing before you sign and usually deducted from the advance.
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An exit, agreed before funding.
Every private file I set up has a written exit: a sale with a listing date, or a refinance to a B-lender once the bureau has cleaned up. Without a realistic exit I don't do the deal, because renewing a private mortgage year after year is how people lose equity.
Twelve months is the plan. If I can't see how it ends inside that, I'd rather tell you no.
Timeline
Getting a Private Mortgage Funded in Days
- 1
First conversation.
What happened and how the money gets repaid. Nobody pulls your credit at this stage.
- 2
Appraisal ordered.
This is the longest step. I use appraisers who know Surrey and turn residential reports around in two to three business days. Commercial reports take longer, often a couple of weeks.
- 3
Commitment in writing.
Amount, rate, fees, term, and the exit, on one page. You read it before anything goes to a lawyer.
- 4
Funding.
The lawyer or notary signs you up and the funds advance. Timing often depends on third parties, the lawyers' or notaries' availability in particular, so I book them the day the commitment is signed.
About fees: on private mortgages, a lender fee and a broker fee apply, and both usually come off the advance at closing. You'll see every dollar in writing before you sign, never at the lawyer's office. For most conventional mortgages the lender pays my fee instead.
Surrey Specifics
Private Lenders Have Favourite Neighbourhoods
Private lenders have preferences. The specialized lenders and mortgage investment entities I work with each have places they like. One is comfortable anywhere in South Surrey. Another will fund Newton and Guildford all day but passes on acreage east of 176 Street.
Knowing that saves days. I don't send a Scott Road mixed-use file to a lender who only wants detached homes, and I don't put a South Surrey client with 60% loan-to-value in front of a lender who charges for risk the file doesn't have.
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Questions
Private Mortgage Questions, Answered Plainly
How much equity do private lenders in Surrey want?
Usually a combined loan-to-value of 65–75%. On a $900,000 Guildford townhouse with a $500,000 first mortgage, that leaves roughly $85,000 to $175,000 of room. Stronger properties and lower loan-to-values get better pricing.
How fast can a private mortgage close in Surrey?
Plan for a week on a clean file with everything in hand, including an appraisal. Lenders are one party, but the appraisers, lawyers and notaries have their own schedules and priorities.
What happens when the twelve months are up?
You exit as planned: sell, or refinance to a B-lender or bank. I start the refinance paperwork around month eight so the payout lands before the term ends. If the exit slips, most lenders will renew for a fee, but renewing twice is a warning sign.
Do private lenders check my credit?
Most pull a bureau. They read it for context, like a consumer proposal from three years ago that's been paid, rather than applying a minimum score. The property and the exit carry the decision.
Are there different types of private lenders?
Yes, broadly two. Specialized institutional private lenders and mortgage investment entities pool money from investors and lend it on set guidelines, so their pricing and renewals are predictable, and they handle most of the private volume in Surrey. Individual lenders put their own money out, usually through a lawyer, and can be more flexible on an unusual property, like acreage east of 176 Street. The paperwork on your side is the same either way: an ordinary mortgage registered on title. I use both, and the choice comes down to which one likes your neighbourhood and your property type.
Can I get a private mortgage on a rental property?
Yes. Private lenders will fund rentals and second homes, and some mixed-use buildings along Scott Road, usually at a slightly lower loan-to-value, around 60–70%. The rent needs to be real, with a lease or deposits showing in a bank account.
What does a private mortgage cost beyond the rate?
A lender fee and a broker fee, both usually a percentage of the loan and deducted from the advance, plus the appraisal and legal fees. On a $200,000 private second the appraisal and the legal work generally run several hundred dollars each. All of it is written out before you commit.
Guides
Related Guides
Start with the Surrey hub, or go straight to the guide closest to your situation.
Written by Sarup Chandi, Mortgage Broker, Centum Chandi Mortgages Inc.
7092 125 Street, Surrey, BC V3W 0T9 · 604-970-5030 · Last updated
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