Getting a private mortgage is simpler than getting a bank mortgage in some ways, and more involved in others. There’s less focus on your credit score and paperwork, and more on your property and your plan. Here’s the whole process in Alberta, from the first conversation to the day the money arrives.
Step 1: Talk through your situation
If you’re new to the idea, start with What Is a Private Mortgage?. Then explain what you need and why: how much, what it’s for, your deadline, and how you plan to pay it back. A good broker will also ask whether a bank or alternative lender might approve you, because those options cost less. If you’re not sure where you fit, see who private mortgages are for.
Step 2: Gather your documents
Private lenders need less than banks, but they still need enough to understand the property and the plan. Common items include ID, your property tax notice, your current mortgage statement and proof of home insurance. See the full document checklist.
Step 3: Get the property appraised
Because private lenders lend against equity, an independent appraisal usually comes first. The appraised value sets how much you can borrow. Our loan-to-value guide explains how that works.
Step 4: Compare offers
Your broker presents your file to one or more private lenders. Each interested lender sends terms: the amount, rate, fees, term length, payment and conditions. Compare them on total cost and on flexibility, such as prepayment and renewal terms, not just the rate.
Step 5: Accept a commitment and meet the conditions
Once you choose an offer, the lender issues a commitment. It usually lists conditions to satisfy before funding, like a satisfactory appraisal, proof of insurance or payouts of certain debts. Getting these done quickly keeps things on schedule.
Step 6: Meet with your lawyer
In Alberta, a lawyer prepares the mortgage documents, explains them to you and registers the mortgage at Land Titles. Read everything, ask questions, and make sure you understand the fees, payment, maturity date and what happens if you miss a payment. Use your own lawyer, not one chosen by the lender.
Step 7: Funding
After the documents are signed and the mortgage is registered, the lender releases the funds through the lawyers. Debts or arrears that were conditions of the loan are paid directly, fees are deducted, and you receive the rest.
Step 8: Work your exit plan
The day you fund is the day to start on your way out: rebuilding credit, documenting income or preparing a sale. Book a check-in with your broker a few months before the term ends. See your exit strategy.
How long does it take?
It depends on the appraisal, the lender’s conditions and the lawyers’ schedules. Private mortgages can often move much faster than bank mortgages. Our guide on how fast a private mortgage can close covers what speeds things up.
Ready to start?
A licensed mortgage broker can tell you within one conversation whether a private mortgage is realistic and what the next steps are.
This article is general information, not financial or legal advice. Lender requirements, rates and fees change and depend on your situation.