What a Private Mortgage Lender Actually Looks at on Your Application (Hint: It’s Not Your Credit Score)

A private mortgage lender looks first at the property you are borrowing against: what it is worth, how much equity it holds, and how you plan to repay the loan. Credit score is not the deciding factor, and at BMC Mortgage & Investments there are no credit checks, no income verification, and no upfront fees. If a bank has turned you down, your Alberta property may still make a strong application. Contact BMC Mortgage & Investments to talk through your property and your options.

Forget the Credit Score, Start With the Property

Banks start with the borrower. They pull a credit report, add up income, and test both against a set ratio. A private mortgage lender reverses the order and starts with the real estate. The first question is what the property is worth and whether it holds up as security for the loan.

BMC puts it simply: your home is our client. Risk still gets assessed, but it is measured through the property rather than your credit history. BMC works with various sources to appraise a property so a borrower’s available equity is maximized, and it lends against residential, farm, and commercial properties across Alberta, along with raw land.

Your Equity Position Is the Real Underwriting Anchor

Equity is the difference between what a property is worth and what is owed on it, and it sets how much a lender will advance. The private lending industry tops out at 80% loan-to-value, and BMC typically caps at 75%. That means total borrowing against the home, existing mortgage included, stays at or below three-quarters of its value.

Two factors move that number: the appraised value and the balance already owing. A higher appraisal or a lower mortgage balance increases the room available. That is why a private mortgage lender asks about both before anything else.

Why Every Private Lender Wants to Know Your Exit Strategy

A private mortgage lender wants an exit strategy because the loan needs a defined way to end or be replaced. An exit strategy is simply your plan for repaying the loan. Common ones include refinancing with a bank once your credit recovers, selling the property, or paying the loan out from another source.

BMC tries to help clients move back toward bank financing where that is realistic. Other clients prefer the individualized service and stay, so a good exit plan can also be an ongoing relationship. Either way, spelling out the plan shows the loan fits your situation, which protects you as much as the lender.

Income Still Matters, Just Not the Way a Bank Uses It

A bank uses income to decide whether you qualify. A private mortgage lender may use it, at most, to see whether the plan holds together. BMC does not require income verification as a condition of approval, so a self-employed contractor without steady paystubs, or someone with income a bank does not recognize, is not shut out.

A loan still has payments, though, and a plain conversation about how you will cover them helps BMC recommend something that fits. Borrowing more than you can comfortably carry puts the home securing the loan at risk, which serves no one.

Two Applicants, Same Credit Score, Two Very Different Offers

Picture two Edmonton homeowners with the same credit score. Each owns a home appraised at $600,000. The first owes $200,000 on an existing mortgage, and the second owes $400,000. These figures are for illustration only.

At a 75% cap, total borrowing on either home can reach $450,000. The first homeowner has room for up to $250,000 in new borrowing. The second has room for only $50,000. Credit score never entered the calculation, so the gap comes entirely from equity.

The reverse holds as well. A weaker score does not shrink the offer, and a stronger score cannot create equity that is not there. The purpose of the loan and the exit plan shape the rest of the terms.

What This Means for How You Should Prepare Your Application

Prepare the story of your property rather than a stack of paperwork. These steps make the first conversation faster:

• Start with your current mortgage balance and any other debt registered against the property.
  
• Get a realistic sense of what the home is worth.
  
• Decide what the loan is for, whether renovations, debt consolidation, or a buyout after a separation.
  
• Write your exit plan in a sentence or two.
  
• Give a straight account of your situation, including any foreclosure notice or tax arrears.
  

Being upfront matters most with that last step. BMC works with homeowners facing exactly those pressures, and honest information lets the team respond quickly.

Frequently Asked Questions

How long does a private mortgage lender take to approve an application?

Approval at BMC typically comes within 24 to 48 hours once all required information is gathered, and sometimes the same day. Funding takes longer, realistically 7 to 10 business days from signing the service agreement, because every mortgage is arranged through the lender’s lawyer. Complex files, such as an active foreclosure, can extend that timeline.

Can a bank decline stop me from working with a private mortgage lender?

A bank decline does not rule you out. Private lending serves borrowers who fall outside a bank’s approval criteria, including self-employed owners, people with credit challenges, and owners of farm or commercial property. What matters is the property and your plan for the loan.

Is a private mortgage lender more expensive than a bank?

Banks usually offer lower rates, so a private mortgage lender generally costs more. In return, you get access when a bank says no, a decision built around your property rather than your file, and a more individualized process. BMC charges no upfront fees, and many clients stay for the personal service even after bank financing becomes an option.

Send BMC Mortgage & Investments a few details about your property and what you need, and you will get plain-language answers about your options.