The government regulates banks in Canada but tough rules seem to deter borrowers who seek alternative financing. Private lenders are less regulated and so they specialise in servicing hard to place mortgages that banks would reject. Banks in Niagara Falls only give credit to people with 600 credit score points and the rest are left to seek alternatives offered by private lenders who may be individuals or companies who wish to gain from real estate. They do not have to follow the same rules as banks so if you didn’t qualify for a bank loan, private mortgage lenders in Niagara Falls might help.
Niagara Falls private lenders prefer offering money in form of registered mortgages secured by real estate. The lender is allowed to sell a property if the lender is unable to pay, according to the Ontario Mortgage Act. Private lenders can offer amounts as low as $20,000 to be paid in one year unless the client requests otherwise. For riskier mortgages where the borrower needs a second mortgage or has no income, the mortgage fees will be higher than a regular bank loan. Private mortgage lenders generate income by investing in the lucrative real estate market. They are attracted to Niagara Falls because of its record high real estate prices.
Private lenders want to see the market value and total debts on a property before they can make a decision. Banks consider the credit score when choosing whom to grant loans but that doesn’t seem to bother private lenders who have other methods of measuring credit worth. The private lender will divide total debts by appraised value of the home to get the loan to value (LTV) ratio. A house with a market value of $1,000,000 and debts totalling $800,000 will have an LTV of 80% and most of the private lenders in Niagara Falls will not lend to the property with a loan to value greater than 85%. There is a huge risk in loaning people with bad credit so private lenders take extra measures to protect themselves. This is why you must pay upfront fees for processing a private mortgage. The money is used to pay home appraisal, real estate lawyers, lender staff and other professionals involved in arranging the mortgage.
While applying for a private mortgage you will be asked to state your reasons for needing the loan. They are usually very lenient compared to banks and will accept most reasonable answers. Some popular responses include:
People who do not qualify for a low-interest loan offered by banks are the kind of clients sought by private lenders. Our network of private lenders in Niagara Falls also services other parts of Ontario.
The main banks in Niagara Falls have to follow a rigorous time-consuming mortgage approval process. There is no way you can convince the bank to speed up its mortgage approval process. This can be problematic for property sales that need money rapidly. The solution is private lenders who can offer loans much faster than lending institutions like banks. If need be, the loan can be processed in as few as 24 hours. Our network of private lenders in Niagara Falls can loan on real estate in every city and town in Ontario province.
Niagara Falls is in Ontario province in the southern part of Canada. It shares the border with the US and the Ontario real estate market has long been the subject of heated debate because of Toronto and other cities that have experienced widespread growth in the real estate sector over the last few years. Many people in Niagara Falls are becoming private real estate lenders to gather some spare income. In addition to being an economic powerhouse in Canada, Ontario province is one of the most desirable places to live.