Private Financial Lenders
Most Canadian financial institutions will not consider giving a second or third mortgage due to the higher risk associated with these types of loans and mortgages. Financial institutions are also reluctant to give mortgages to people who are self employed or have a poor credit rating. The result is that a large number of people cannot get a loan from traditional Canadian financial institutions. On the other hand, private financial lenders can provide second and third mortgages, they can also provide loans to people who are self employed or have a bad credit score.
Private financial lenders can provide first mortgages, second mortgages and third mortgages for homes and properties across Canada. First mortgages have the lowest interest rate since they are the most secure, first mortgages have first claim to any money when the house is sold. Second mortgages and third mortgages have a higher risk and therefore they have a higher interest rate. Private financial lenders also provide funds for refinancing of your existing mortgage even if you have a poor credit rating. Private financial lenders can also replace an existing first and second mortgages with one new first mortgage, the new combined first mortgage can result in lower overall interest payments.
Your personal credit score can have an impact on whether or not you qualify for a loan or mortgage with the major Canadian banks. Most Canadian banks and financial institutions will not provide funds if you have a poor credit rating but private financial lenders do not base their lending decision on your present credit rating. Most private financial lenders are interested in the loan to value (LTV) ratio in your home or property. If you would like to know what your credit score is go to the Equifax website and follow the tabs indicating a free copy of your credit score.
Most private lenders small business require a personal inspection of the property as a condition of getting approved for a mortgage. The inspection process is fairly simple and straight forward; the private lender is looking for any obvious defects or damage, leaky roofs, broken doors or windows and any holes in the drywall that may bring down the value of the property. The owner should clean the house to make it look presentable; painting can be an easy way to hide any marks on the walls and a new coat of paint can make a house look clean. If the loan is for repairs or renovations to the house or property show the private lender what work is to be done and how it will increase the value of the property.
Private Lenders Small Business
A private lender can be the best alternative for many Canadians looking for a loan. If you have been turned down for a loan by financial institutions because of a poor credit rating or you are self employed a private lender can help. Private lenders small business will look at your entire financial situation not just your credit rating. For more information on private lenders small business please give us a call today.