There are many desirable options for Ontarians to buy property. With towns and cities dotted throughout the Province, many choose to live in a given area based on specific factors which may include easy transportation options, a relaxed lifestyle, and easy access to a host of amenities.

Bolton can offer many things on a homeowner’s wishlist. Located on the beautiful Humber River and only 50 km from Central Toronto, Bolton represents attractive commuting potential. The population as of the 2017 census is 26, 378 which keeps the smaller town feel that many find pleasant. Amenities are also very accessible to those that choose to call Bolton home.

Over the last year and a half property prices have appreciated considerably despite the ongoing financial implications of a continued and prolonged pandemic. Real estate numbers are nothing less than astonishing.

According to the Monthly June 2021 Housing Report for Bolton, the average price of a single detached residence has skyrocketed to $1,780,784. This represents a 71.3% monthly increase from May 2021, a 79.1% 2021 quarterly increase, and a 121.7% year-over increase from June 2020.

Private Mortgage Loan Options are Available for The Bolton Homeowner/Borrower

It is one thing to apply for mortgage financing when credit is exemplary and there is a substantial easy-to-calculate yearly salary. Even more straightforward when it can be demonstrated that a borrower/homeowner has additional assets on which to secure mortgage financing.

What lending options are available when credit is an issue?

If a Bolton borrower/homeowner has poor credit the banks will not be able to offer mortgage financing. Mortgage professionals classify Banks as A lenders. These lenders make obtaining mortgage financing equity difficult. This has been come especially true since mortgage stress tests were introduced in 2017 and as recently as June 01, 2021, these stress tests have become more stringent

While other lending options may be available which include credit unions and trust companies, these lenders will be looking for certain criteria that may not be met if credit remains an issue. These lenders that are categorized as B lenders will still require substantial household income, low debt ratio as compared to overall household income, and solid credit (generally a minimum credit score of 550)

There are many well-established Private lenders throughout Ontario and in the Bolton area that will be able to offer secured mortgage loans despite poor credit. The mortgage industry classifies these lenders as C lenders.

What Criteria are private lenders (C lenders) looking for? 

When the banks are evaluating whether a borrower will be approved for mortgage financing, they are basing their calculations on criteria that will apply for a long-term amortized mortgage. To do so, very strong credit is required, and banks must be able to easily calculate household income. 

Private lenders, on the other hand, will base their calculations predominantly on the appraised value of your property if you are a current Bolton homeowner seeking a form of the second mortgage.

For a current homeowner who may require a second mortgage, a private lender will be basing the mortgage loan criteria predominantly on a recent appraisal of the property. The loan will be secured against the home which is used as leverage. 

Generally, private lenders will not lend out more than 75% of your property’s current value, which is referred to as a 75% Loan-To-Value (LTV).  A private lender will also prefer to see 25% existing equity in your home.

A loan with a higher than 75% LTV is deemed high-risk for a private lender. The job of a private lender is to try to mitigate risk while providing short-term financing for those that may have been turned away from the banks due to credit issues/debts.

For first-time buyers, private lenders will require a substantial down payment but will be able to negotiate terms on a private mortgage loan despite credit issues. Private lenders will also take into consideration all types of income including self-employed, contract-based, and investment or rental income.

Private mortgage loans are structured differently than long-term amortized mortgages offered by most banks in two major respects.

  • Private loans are negotiated quickly, and the process is straightforward
  • Private mortgage financing is on a short-term basis – There are different private loan options 
  • There are different secured private mortgage loan options:  Debt consolidation loans, Home renovation loans, Home Equity Line of Credit (HELOC), Home Equity loans, Primary mortgage

A private mortgage loan will typically be between 1 to 3 years in length and private lenders will be able to negotiate mortgage loan terms within days as opposed to the time that takes the banks to finalize many loan applications which can be weeks.

Key Ways to Improve your Credit

Regardless of your credit standing, to secure the most favorable terms on a secured mortgage loan, it is crucial to take any necessary steps to improve your credit score. This will help with terms negotiated on a short-term private loan option and will put you in good standing when applying for mortgage financing down the homeowner road when looking to renew mortgage terms.

The first step is to pull your current credit report and review it extensively. Start to make changes to payment approaches. Pay all bills on time and in full. Try not to carry too much of a balance on your credit cards (ideally start and keep paying balances in full at the month on high-interest credit cards) and use credit responsibly. Avoid any big purchases or taking out additional loans or credit cards (this will impact your credit score by lowering it slightly).

By taking control of credit issues, you will be able to approach a private lender to get you on the road to mortgage financing. By paying a short-term private mortgage loan monthly payment in full and on time, your credit score will improve significantly. This will be put you in an enviable position to obtain additional mortgage financing in the future.

Mortgage Broker Store Will Help Direct You Towards Private Mortgage Options

If you are a Bolton homeowner or a borrower that would like to obtain mortgage financing, don’t let credit issues stand in your way of purchasing a home or taking out hard-earned equity from your property to pay for needed expenses. 

Mortgage Broker Store has access to a broad network of private lenders in the Bolton area. A private lender will be able to sit down with you and discuss your options directly which will help you achieve your mortgage goals. 

At Mortgage Broker Store we are in a position to look at your unique financial circumstances and advise as to the best private loan options and lenders that will be able to handle your financial objectives directly.

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