The Canadian lenders have set high criteria when applying for a loan. The reason for the higher criteria is to reduce their exposure to bad debt. This means that people who can afford a mortgage are turned down for reasons which may not make any sense to the borrower. Some come reasons a lender may turn you down are for a bad credit rating or if the loan to value of their property is too high. Most private investors for home loans usually only lend within certain geographic areas and will consider each loan application based your entire financial situation.
Most Canadian lending institutions will not give a loan or mortgage to people who are self employed without proof such as a “Notice of Assessment” from Revenue Canada. Most lenders require “Notices of Assessment” for the past three years; if you do not have a “Notice of Assessment” you will find it very difficult to get a loan from most Canadian banks. Most private investors for home loans do not require a “Notice of Assessment” from Revenue Canada since the lending decision is based on the equity in your home. For self employed people private investors for home loans may be their best any only alternative.
Many private investors for home loans use the loan to value ratio on your home as the primary criteria for making a loan, therefore it is important to be able to determine the loan to value (LTV) ratio of your home. To find the LTV divide the amount owing on your house by the value of the house, for example if you owe $100,000.00 on your home and the value of the home is $300,000.00 then the LTV is 33.3%. It is a good idea to find out what your property is presently worth since the value of your house can fluctuate and increase or decrease your LTV ratio. To get a better idea of your properties present value you should talk to a local real estate.
Appraisals are done for almost all transactions that involve a mortgage with private loan brokers. The job of the appraiser is to provide an independent third party option on what the current market value of the house is. The appraiser inspects the house to determine its present condition. If the house is well maintained with recent upgrades such as new roof, new furnace and the house is in very good condition, the house may receive a higher market value when compared to other homes in the area. The appraiser compares the sale value of three other similar homes within the same geographic area. Factors such as size of the property, square footage of the house, finished basement, pool/sauna, number of bedrooms and bathrooms help determine a fair market value for the house being appraised.
Our agents have access to one of the largest networks of private investors for home loans in the country. This network is designed to help people with hard to place loans. Call one of our mortgage agents today to find out how a private loan brokers mortgage can help your financial situation.