If you have been turned down by a lending institution because of a poor or bad credit rating or you are self employed then a private lender may be able to provide the money you need. Private lenders are an alternative for people who do not meet the bank requirements. People who can tell you how to find a private lender can provide funds for second mortgages, secured private lender home loans, home renovation and credit card debt consolidation private lender home loans. Many lending institutions do not fund these types of loans due to the higher risks associated with the loan. In contrast, people who can tell you how to find a private lender base most of their lending decision on the equity in your home.
Most Canadian lending institutions will not give a loan or mortgage to people who are self employed without proof such as a “Notice of Assessment” from Revenue Canada. Most lenders require “Notices of Assessment” for the past three years; if you do not have a “Notice of Assessment” you will find it very difficult to get a loan from most Canadian banks. Most people who can tell you how to find a private lender do not require a “Notice of Assessment” from Revenue Canada since the lending decision is based on the equity in your home. For self employed people who can tell you how to find a private lender may be their best any only alternative.
Most people who can tell you how to find a private lender consider the loan to value (LTV) ratio of your property to be the main factor in deciding to fund your loan. A loan to value ratio over 85% usually means that your chances of getting any money are low while a loan to value ratio below 75% means that your chances of getting money for your mortgage is very good. The difficult range for a loan to value ratio is between 75% and 85%. People who can tell you how to find a private lender will consider each person’s situation to decide on whether they qualify for a mortgage. For people with a very high loan to value ratio, other factors mat also include, how long it takes to sell a house, or whether the private investor lives in the same geographic area. To determine the loan to value ratio of your home divide the present mortgage amount by the value of your home, for example a $200,000.00 first mortgage divided by the $400,000.00 value of the property, results in a loan to value ratio of 50%.
most mortgage and loan transactions a private lender requires an appraisal of the house or property. Appraisers provide an independent estimate of the present value of a house or property. An appraiser will compare your house to three other similar houses that have sold in your local geographic area. Adjustments will be made for factors such as different square foot or the number of bedrooms and bathrooms in a house. The appraised value will be the amount that the mortgage or loan will be based upon, as the property owner you should make sure the house is clean and tidy before the appraisal is done so you can maximize the property value.
Our brokers strive to provide you with the best service and advice possible. We will be totally honest with you and tell you the pros and cons of all the mortgage options that are available to you. People who can tell you how to find a private lender are an excellent source of funding when other financial institutions have turned you down. Call our brokers for more information on private lenders.