Canadian banks are subject to several regulations by the government but the tight controls deter many customers from seeking loans with them. To give a loan, banks must see a high credit score of 600 points or more but this is not achievable by most people. The alternative is private lenders who do not have to follow the same rules and can, therefore, service hard to place mortgages turned down by banks. Private mortgage lenders in Halton Hills, Ontario are able to help property owners whose mortgage applications were thrown out by banks.
Halton Hills private lenders will give out money as registered mortgages secured against real estate properties. This way they are allowed by the Ontario Mortgage Act to sell the property if the owner is unable to pay the fees as agreed. The loan amount may be as low as $20,000 for one year unless the client requests otherwise. An extended term is the preference of low-income earners who are comfortable with paying small amounts each month to finish payments after the usual one year. Second mortgages are an example of high-risk investments which attract higher interest rates and fees than ordinary bank loans. Private lenders are individuals or firms who generate profits from real estate. They are attracted to the Halton Hills real estate market, which has recorded some of the highest appreciation rates in the country.
Private mortgage lenders in Halton Hills focus on market value and debts on a property when gauging mortgage applications. This is different from banks which rely on credit score to decide who to loan. Private lenders must calculate a metric known as Loan to Value ratio on a property to decide whether to invest or not. To calculate LTV you have to divide the value of existing debts by the appraised price of your house. The ideal result should be 85% LTV on a residential property or less as no private lender will give a mortgage to the property with too little equity. In spite of the registered mortgage granting them the power of sale, private lenders know they might not be compensated because lenders must get paid in order of occurrence. Private lenders may not concentrate on credit score but they are sensitive to risk and will not loan to properties with very many debts.
You will be required to state why you need the loan when applying for a private lender mortgage. This shouldn’t scare you as they accept any reasonable answer, unlike banks who need available reason to approve your loan request. Common responses include:
Those who are not able to get bank loans are the kind of clients a private lender likes to work with. Our network of private lenders in Halton Hills can easily provide loans to individuals who were rejected by banks.
The government requires banks to follow a certain procedure for mortgage approval but this is time-consuming. Some customers cannot wait that long and choose private lenders who are able to provide funding much faster. If the need arises, private lenders can give you the money in 24 hours to help you meet those urgent obligations. Our network of private lenders also services other cities and towns in Ontario, Canada.
Halton Hills is a town in located outside the Greater Toronto area in Ontario. This is the area that drew attention to the province by recording some of the highest real estate prices in the industry. Many people looking to supplement their income are turning to private real estate lending. Ontario as a whole has experienced double-digit growth in prices over the last two years. This is a million dollar industry and experts believe that the trend will continue as Ontario stays on as the economic powerhouse of Canada as well as one of the most desirable places to live.