Should You Use a Private Mortgage to Secure a Pre-Sale Condo?

Buying a pre-sale condo in Canada comes with exciting possibilities, but also financial challenges, especially as completion day approaches. Many buyers assume traditional bank financing will be available when the unit is ready, only to find out they no longer qualify due to income changes, stricter lending rules, or a drop in property value.

This is where a private mortgage can help bridge the gap.

Why Traditional Financing Often Falls Short with Pre-Sales

Banks and credit unions typically assess your mortgage eligibility at the time of completion—not when you first signed the purchase contract. If it’s been two or three years since you made your deposit, your financial situation may look different today. Here are some common reasons bank financing falls through on pre-sale completions:

• Your income has changed or is harder to verify (especially for self-employed borrowers).
• The appraised value of the unit comes in lower than your purchase price.
• Your debt-to-income ratio has increased.
• The lender no longer offers the same product or terms you were counting on.

When you’re weeks away from closing, a financing shortfall can put your deposit—and your entire investment—at risk.

How a Private Mortgage Can Save the Deal

A private mortgage for pre-sale completions is designed to step in when traditional lenders step back. These loans are funded by private individuals or mortgage investment corporations and are based more on the value of the property and your exit strategy than your income or credit.

Here’s how private lenders in Canada offer flexibility when you need it most:

• Fast Approval: Private lenders can often approve and fund deals in days, not weeks.
• Income Flexibility: You don’t need perfect credit or easily verifiable income.
• Short-Term Bridge: Most private mortgages are interest-only and short-term (6–24 months), giving you time to refinance later or sell.

This makes them especially useful for pre-sale buyers who are short on time and options.

Is a Private Mortgage Right for You?

Private financing isn’t for everyone. Rates are higher than traditional mortgages, and fees may apply. But in situations where the clock is ticking, and conventional lenders say no, it’s often the only solution to close the deal.

Ask yourself:

• Are you at risk of losing your deposit?
• Is your income non-traditional or recently changed?
• Has the bank denied your financing at the last minute?
• Are you confident you can refinance or sell within 12–24 months?

If the answer is yes to any of the above, it’s worth speaking with a mortgage broker experienced in private mortgages for pre-sale condos.

Need private financing for a pre-sale condo?

When used strategically, a private mortgage can be a powerful tool to protect your investment and close on your new home. At Niche Mortgages, we specialize in helping clients find short-term, flexible lending solutions—whether you’re facing a financing gap or need to close fast.

Contact Niche Mortgages today to explore your options with a trusted mortgage advisor.