With the current housing market and high interest rates, getting a mortgage in Ontario and many other provinces in Canada has become more difficult than ever. Newcomers—especially those with limited credit history or job stability—may find it especially tough to qualify for a traditional mortgage.
For those facing this challenge, private lenders can offer an alternative, though they often come with higher costs. Therefore, it’s crucial for borrowers to be well-informed when considering alternatives.
The Financial Services Regulatory Authority of Ontario (FSRA) has launched its annual multilingual awareness campaign, which educates and empowers consumers to ask the right questions so they understand the costs and risks of private mortgage products.
“There is a wave of mortgage renewals this year. Families are facing increases that are much higher than when they first secured their mortgage years ago,” shares Antoinette Leung, Head of Financial Institutions & Mortgage Brokerage Conduct at FSRA. “If you are thinking about getting a private mortgage, I encourage everyone to ask a lot of questions, know what you are getting into, and have an exit strategy,” he says.
Also read: BMO NewStart Program for newcomers to Canada
FSRA’s alternate/private mortgages campaign aims to educate diverse communities about their options and offers tools and resources for private mortgage financing. Here are some tips they offer:
- Private mortgages are usually short-term solutions. They are recommended only until consumers’ financial circumstances improve and they can get mortgages from traditional lenders, like banks or credit unions.
- It’s essential to plan for the transition back to traditional lenders. Consumers should have an exit strategy to achieve financial stability as quickly as possible.
- If an individual decides to go with a private mortgage, they should consult FSRA-licensed mortgage professionals who can offer expert advice on the terms and conditions of these loans.
Also read: How private mortgages can help newcomers fund their new homes
Share this article with friends, family, and newcomers to help them better understand their mortgage options in Ontario.