What should the private loan be for?
A private loan buys time. It doesn’t solve anything. A private mortgage can give you time when standard financing isn’t available. But it needs a precise job. "We’ll look at it later" is not an exit plan. Name the event you’re expecting, its date, and the evidence that should let you refinance or sell.
Which records explain how you got here?
Private financing exists to correct something. To know what, pull the records that describe the current obstacle:
- Your current mortgage statement and notice of any arrears
- Your credit report, with the balances and the late payments recorded on it
- Your notices of assessment and the details of a tax balance, if there is one
- Your most recent proof of income and, where applicable, what explains an interruption
- The property tax bill and your insurance policy
- A prudent estimate of the property’s value
That list is what becomes your exit plan. Without it, you’re negotiating a rate without knowing how many months you need to buy.
What does it cost in total, beyond the rate?
The interest rate doesn’t show lender fees, legal costs, or the amount that will reach you. Some costs are paid in cash. Others get added to the balance, and earn interest of their own.
| Element | Question to ask | Figure to record |
|---|---|---|
| Interest | On what balance and for how many months? | Expected cost to maturity |
| Lender and broker fees | Paid in cash or withheld from proceeds? | Net cash received |
| Legal and appraisal costs | Who pays and when? | Cash required before and after closing |
| Extension or renewal | What terms and new fees apply? | Cost if the exit takes three extra months |
Also confirm the payment dates, penalties, prepayment terms, and what happens on default. Important clauses belong in the written agreement, not just in a conversation.
How do I turn “improve credit” into a dated plan?
To get back to standard financing, that has to become a list you work through: which balance to repay, which error to correct, which income to stabilize, which history to complete. For a sale, add the listing date, a prudent price, and selling costs.
Keep a plan B, too. If the sale drags or the file isn’t ready, what does an extension cost? How much cash do you have left? At what date does the plan stop working?
What does a three-month delay cost?
Your plan calls for an exit in nine months. Your budget should show what happens in month twelve. Ask for a written estimate of the possible added interest and fees. Then add the costs that keep running during that delay: property taxes, insurance, maintenance, payments on your other debts.
| Date | Calculation to make | Decision |
|---|---|---|
| Planned exit | Balance due and accumulated cost | Are the expected proceeds enough to refinance or sell? |
| Three months later | Interest, new fees, and cash remaining | Can the delay be carried without another loan? |
| Personal deadline | Total cost and a prudent property value | When must the strategy change? |
Write that deadline down before the money arrives. It’s what triggers a sale, a smaller project, or another plan while there’s still time to act. An extension permitted by the agreement is not a financial reserve.
Which signs say private financing has stopped helping?
Private financing is a transition only when the time you bought is used to finish something measurable. It gets too fragile when it postpones a shortfall that returns every month, when it leans on an optimistic sale value, or when it requires standard refinancing whose return conditions nobody can name.
| Warning sign | Question to settle before signing |
|---|---|
| The payment works only by borrowing elsewhere | What source will repay the loan at maturity? |
| The exit relies on a quick sale at the best price | Does the scenario work with a delay and a more prudent price? |
| Credit, income, or debt corrections have no dates | What evidence should exist at each review? |
| An extension would use up remaining liquidity | On what date must the strategy change? |
Which mistakes make private financing dangerous?
- Signing without a dated exit plan. "We’ll look at it later" lets maturity arrive with nothing corrected, and an extension becomes the only option left.
- Comparing offers on the rate. Lender and legal fees can shrink what you receive or swell the balance. What counts is the net amount and the cost to maturity.
- Not pricing a three-month delay. A sale or a credit correction often takes longer than planned. What that delay costs should be visible before you sign.
What if the file takes nine months to fix?
A homeowner takes a nine-month private loan while paying off a tax balance and documenting income that has become stable again. His budget includes interest, lender fees, legal costs, and a three-month extension. We meet at months three and six to check where he stands.
This scenario is fictional and does not confirm that a standard lender will accept the file in month nine. It shows why the exit gets tracked throughout the loan, not the week before maturity.
What does Mathieu do through the exit?
I’ll also tell you when the cost or the timing makes the scenario too fragile to present to you as a solution. Independent legal advice may be needed to interpret the agreement. The lender stays responsible for its decision and its conditions.
Three short answers
Does the monthly payment show total cost?
It shows only part of it. Lender, broker, legal, and other fees can shrink what you receive or swell the balance you have to repay.
Why price an extension if an exit is planned?
Because a sale, a credit correction, or a new lender review can take longer than expected. What that delay costs should be visible before you sign.
Can a private mortgage be renewed?
It depends on the agreement and the lender. A renewal can come with a new rate or added fees. Never assume it.
Sources and review
AMF — Types of mortgage loans, AMF — Residential mortgage brokers, and FCAC — Getting a mortgage: know your rights. Reviewed August 16, 2026.