The government has placed strict rules on Canadian Banks but this turns away many people who would rather get loans from private lenders. Most private mortgage lenders in Whitby exclusively offer hard to place mortgages for people that are turned down by banks. Since they do not have to follow the same rules as banks, private lenders are able to loan people who were turned away by banks. By considering the equity in a property, private mortgage lenders in Whitby offer low-income earners and people with low credit score to access loans. With the money, they can meet financial obligations including education, home upgrades or emergency medical expenses.
Whitby private lenders like to loan out money as registered mortgages secured against real estate. This is ideal because this way, the Ontario Mortgage Act allows them to sell a property if the borrower doesn’t honour the agreement. Private lenders in Whitby generally offer loans for one year (unless you prefer otherwise) and the amount may be as little as $20,000. If it is a riskier second mortgage or the applicant has no income, private lenders will charge higher fees compared to regular bank loans. Private lenders are usually individuals or companies looking to profit from real estate. The Whitby real estate market is particularly attractive, being in Ontario which boasts some of the highest real estate appreciation rates in Canada.
To offer loans, private lenders focus on the market value of the home versus the total of its debts. Banks use credit score to reach a lending decision but this is not a concern for private lenders who need to calculate LTV. Loan to value ratio is obtained by dividing the total of debts by a property’s current price. If a house is worth one million dollars and has debts of $800,000 the LTV will be 80% which is acceptable by most lenders. Many private mortgage lenders in Whitby only offer loans for up to 85% on a property. This is to ensure that they get back as much of their investment as possible because it is only a matter of time before the client defaults. Even with a registered mortgage, the money gained from a power of sale may not be enough to compensate others who came before the private mortgage lender in Whitby.
While applying for a private lender mortgage you will be asked to say why you need the money. Private lenders are very lenient compared to banks and tend to accept most reasonable explanations. Some popular explanations are:
People who couldn’t qualify for low-interest bank loans are the main targets for private lenders. Private lenders in our network can quickly provide mortgages to those who were turned away by banks. This is very useful for stopping power of sales, foreclosure or other urgent financial needs.
Major banks in Canada are required to follow a long, comprehensive process to approve loans and there is no way to speed up things. This is a major problem especially when there is an urgent need for funds. Private lenders do not have to follow the same rules as banks and can, therefore, offer loans much faster. If need be, it can take only 24 hours to get funding from private lenders. Our network of private lenders can loan to people in every city and town of Ontario.
Whitby is in Ontario, one of the most discussed provinces in Canada. This is because the real estate market recently gained by double digits, prompting many people living in different parts of the province to get into private real estate lending as an ideal way of earning extra income. Ontario is a notable economic powerhouse and also one of the best places to live in Canada.