Private Mortgage Investors
Most people have never heard of private mortgage investors and do not really understand what a private lender does or how they operate. Private mortgage investors fill a need created by the major Canadian financial institutions that are very risk adverse. Private mortgage investors will consider making loans to people with a poor credit rating or that are self employed when no other bank will. Private mortgage investors are the primary source of funds for second and third mortgages; since these types of loans have a higher level of risk major Canadian banks will not consider this type of loan.
Canadian banks have traditionally frowned upon providing mortgages to self employed people, if you are self employed or own your own business you are fully aware of this fact. The banks will ask for a tremendous amount of paperwork and then tell you that you do not qualify for the mortgage since your income is not verifiable. Private mortgage investors understand that many Canadians are self employed and that they can afford to make the mortgage payments. Most private mortgage investors focus on the value of the property which is used as security for the mortgage, as long as there is enough equity in your home most private mortgage investors will provide you with the funds you need.
Most private mortgage investors use the loan to value (LTV) ratio as the primary indicator to funding a mortgage deal. A LTV over 85% means that your chances of getting funding are low while a LTV below 75% means that your chances of getting funding are very good, the tricky area is when your LTV falls in between 75% and 85% LTV. Private mortgage investors will look at each individual situation to decide on whether to provide funding for a mortgage. For very high LTV ratio a key factor may be how long it takes to sell a house, or whether the private investor lives in the same area. To find out your LTV ratio simply divide the existing mortgage by the value of the property, for example a $100,000.00 first mortgage divided by the $300,000.00 value of the property results in a 33% LTV ratio.
Private Hard Money Lenders
Most private mortgage investors require an appraisal for real estate transactions to determine the present market value of a house or property. The appraisal process is fairly simple; a trained and certified appraiser will inspect your home and compare it to three similar homes that have recently sold in your area. Based on the comparative selling prices, features and condition of your home the appraiser will come up with a market value for your home. Private hard money lenders and appraisers like to see a clean and tidy house, so clean up before the appraiser comes to inspect. Cleaning and tiding will also give your property the maximum market value possible.
Our private hard money lenders and mortgage brokers are here to help you get the money required for your mortgage. Our brokers try to make the mortgage process as straight forward and transparent as possible. All our clients are informed of all the possible options before the y choose the mortgage that is right for their situation. For a free consultation call one of our brokers right now to find out how a private lender can help you.