Compare the structure, not just access
Individual lender criteria vary. These are general distinctions, not universal rules.
| Consideration | Conventional bank mortgage | Private mortgage |
|---|---|---|
| Assessment | Generally emphasizes documented income, credit, and debt-service requirements. | May place greater emphasis on the property and equity while still considering ability to pay and repayment. |
| Cost | Often lower for qualified borrowers. | Often higher rates and fees. |
| Term and payments | Frequently designed for longer-term ownership and amortization. | Often short-term; interest-only or other structures may apply. |
| At maturity | Renewal/refinancing still depends on circumstances and terms. | A concrete exit plan is especially important; renewal is not assured. |
A bank decline is a reason to understand the file
Clarify why the application did not fit. Another conventional or alternative option may be appropriate, or it may be better to change the timing or structure. Private financing is not automatically the right next step.
Make the comparison personal—with a qualified professional
This guide cannot determine which mortgage suits your situation. Ask the provider to explain the recommendation, alternatives, costs, and risks in terms you understand.