Private Mortgages Explained: What They Are And When To Use Them
When it comes to mortgage financing, most people think of banks or credit unions as their only option. But for some borrowers — especially those with unique circumstances or time-sensitive needs — private mortgages can be a flexible, practical alternative.
If you’ve ever wondered what a private mortgage is, how it works, or when it might make sense to use one, this post will walk you through the essentials.
What Is a Private Mortgage?
A private mortgage is a home loan offered by an individual or organization rather than a traditional financial institution. These lenders can include private investors, mortgage funds, or specialized lending companies.
Private mortgages typically have shorter terms (often 6 months to 2 years) and are designed to meet specific financial needs — like bridging a gap, rebuilding credit, or closing quickly on a property when time is limited.
Why Choose a Private Mortgage?
Private mortgages offer flexibility that traditional banks can’t always provide. They’re often ideal for borrowers who:
Have unique income sources (self-employed, commission-based, or seasonal)
Need short-term financing to complete a purchase or refinance
Are recovering from credit challenges or bankruptcy
Are purchasing unconventional or investment properties
Need to close quickly and can’t wait for lengthy bank approvals
Unlike major banks, private lenders look at the value of the property and your overall financial potential, not just your credit score or income documentation.
What to Expect: Rates and Terms
Private mortgage rates are usually higher than traditional mortgages because they carry more flexibility and a shorter term. However, they can serve as a bridge — helping you achieve your goals now while you prepare to transition back to a conventional mortgage later.
At Continental Mortgage, we work with a wide network of private lenders to ensure all terms are transparent and fair. We’ll help you understand the total cost, repayment structure, and exit plan before you commit — so there are no surprises along the way.
When Does a Private Mortgage Make Sense?
Here are a few situations where a private mortgage can be the right move:
Fast Closings: When time-sensitive deals can’t wait for bank approvals.
Bridge Financing: When you’re buying a new home before your current one sells.
Credit Recovery: When rebuilding credit before returning to a traditional lender.
Unique Properties: When the property doesn’t meet standard bank criteria.
Private mortgages are tools — not forever solutions. The key is using them strategically to get you where you need to go next.
A private mortgage can open doors when traditional lenders can’t. The goal is to use it wisely — with a clear plan and professional guidance.
At Continental Mortgage, we help clients understand every option, connect with reputable private lenders, and create exit strategies that protect your financial future.
