For outdoor enthusiasts and those that prefer a relaxed quality of life, Sudbury offers both. As the biggest metropolitan area in Northern Ontario, greater Sudbury also represents the largest land area in the Province. As of the latest 2016 population rankings, Sudbury has 161,531 residents. With local attractions and activities for families, Sudbury remains an attractive city to purchase a home.

Over the last year and a half, despite the continued economic slowdown resulting from a prolonged pandemic, Sudbury real estate continues to be robust. For the last year, the average home price has appreciated by an astonishing 20.4%, according to recent statistics released by Sudbury Real Estate Board. 

House sales in May have continued to increase with a 33% quarterly increase in the average home price. The average house price in the region now sits at $492,000. Housing sales in Sudbury have also seen a year-over-year increase of over 80% 

Bad Credit Mortgages in Sudbury for Those with Poor Credit

Mortgage rates continue to stay very low as we claw our way out of the pandemic. These rates are encouraging many to obtain secured mortgage loans to take out primary mortgages (first mortgages) on Ontario properties. They are also encouraging existing homeowners to take out second mortgages to pay for different financial objectives.

To profit from such potential for equity gains borrowers/homeowners will seek lenders to help negotiate the best terms and most favorable interest rates on secured mortgages. This is relatively easy if a homeowner/borrower’s credit is strong and debt ratios remain low. What options are open for those that suffer from poor credit and may have multiple outstanding debts?

Fortunately, there are different secured mortgage loan options open for those that seek financing with damaged credit. The same stands true for those that have high debt ratios compared to household income. These loans are offered by Ontario-based private lenders. Some of the private lending options include:

How will a private lender be able to help? When contemplating any of these loan options, a private lender will be assessing several key criteria which include: 

  • The overall degree of equity existing in your property.
  • The current appraised value of your home (when applying for a second mortgage loan option)
  • Additional assets that can be demonstrated to determine the mortgage amount.
  • Overall debt ratio (compared to overall household income)
  • All sources of income including self-employed, freelance, and contract-based income 

When negotiating bad credit mortgages in Sudbury, a private lender will typically assign an interest rate of between 7% to 12% depending on the type of loan that is being negotiated and the unique financial capabilities of a borrower. Fees associated with most private loans tend to range between 3% to 6% of the loan’s total cost.

As a general rule, 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.

Steps To Take When Preparing for Private Mortgage Financing

There are times in life when the degree of research and preparation that is put in will be directly responsible for positive outcomes. This certainly applies when a borrower/homeowner is contemplating different private loan options. There are steps that you can take before sitting down with a private lender that will best prepare you for negotiating terms on a private mortgage.

  • Research good pre-approval rates.
  • Gather all paperwork necessary including proof of income, investment statements, and proof of assets. 
  • Obtain a recent appraisal of your property if you are looking for a second mortgage loan option.
  • Be clear on your mortgage loan objectives (are you looking for funds to renovate, consolidate debts or maybe buy an additional property)
  • Know your credit score and try to increase your credit score before seeking pre-approval
  • Be in contact with a mortgage broker for direction

A private lender will be able to meet with and by assessing a recent appraisal of your property look at different financing avenues that best work with your unique financial circumstances. Private loans have some distinct advantages for a Sudbury homeowner/borrower:

  • Private loans are negotiated quickly, and the process is straightforward. To obtain financing for immediate expenses freeing up funds through existing equity or to help make a payment towards a principal mortgage as well as other financial goals, a private lender can provide secured mortgage loans faster than the banks/credit union. The loan process is simple and will be finalized quickly.
  • Private mortgage financing is on a short-term basis- Most private loans are structured as short-term loans (typically between 1-3 years). This time will provide the opportunity to restore credit and prove a reliable payment history. By paying the mortgage payments on time and in full for the course of the loan, your credit score will improve.

Mortgage Broker Store Will Help Direct You Towards Private Mortgage Options

If you are a Sudbury 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 Sudbury 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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