Private mortgages are becoming increasingly common because of high home prices and the difficulty of getting a mortgage through a financial institution due to rising interest rates and the earlier introduced stress tests.

So what is a private mortgage? 
Private mortgage loans can be a viable, alternate financing source for borrowers and are typically a high-return investment opportunity for investors. It’s also an option if you’re unable to qualify for a mortgage with a financial institution (bank, credit union or trust company). They are typically approved based on the equity in your home, as well as it’s the location and salability, as opposed to your credit and income.

A private mortgage is typically offered by either a Mortgage Investment Corporation (MIC) or directly by wealthy private investors (individually or syndicated). It’s important to note that private mortgages are more expensive than traditional mortgages and tend to be for shorter terms.