Banks in Canada are under strict government regulations and this causes people to resort to private lenders who are not governed as much. Most of the private mortgage lenders in Barrie offer loans that wouldn’t ordinarily be serviced by banks owing to the strict government regulations. Barrie private lenders are not restricted by the same rules as banks and if you were rejected, they may be able to help.
Private Lender Mortgages in Barrie
Private lenders in Barrie prefer giving loans as registered mortgages against houses or other real estate. This enables them to sell a property if fees are not paid as agreed. This is according to the Ontario Mortgage Act and the loan amount may be as low as $20,000 for one year. Borrowers may request an extension or shorter repayment plan. There will be penalties if you choose to finish paying early but this is a good idea as it grants peace of mind. If you are tight on cash, you can request a longer payment period to make the monthly instalments more affordable.The interest rate for private loans increases as the loan to value increases.
For high-risk investments such as second mortgages or loans for people without income, private lenders demand hefty interest fees compared to the banks. This is a risk mitigation measure taken by private lenders to help them recoup as much of their investment as possible before the borrower is unable to repay. Private lenders are companies or individuals who want to profit from real estate, which explains their attraction to Barrie. The Ontario real estate market has generally seen spikes in real estate prices in the last two years.
Approval Criteria for Private Lender Mortgages
Private lenders are interested in a property’s current market value and all the debts in it. Banks usually depend on credit score when giving mortgages but this isn’t a primary concern for private lenders. They usually calculate loan to value ratio by dividing the property’s debts by its market value. If it is below 85% you will get an offer. A home worth $1,000,000 with mortgages accruing to $800,000 has 80% LTV which is good to get them a deal. In Barrie, most private lenders only loan to properties with less than 85% loan to value ratio. Loan to value ratio that is below 85% indicates too little equity for the private lender to benefit. If they loan to a property with too little equity, private lenders risk losses even after execution of a power of sale.
Reasons for Needing a Private Lender Mortgage
Private lenders will need an explanation for why you need the money. They are quite lenient than banks, accepting any practical explanation. The most popular reasons for needing a private lender mortgage include:
- To pay university and tuition fees
- To pay for home repairs or upgrades
- To pay off other high-interest loans
- To stop foreclosures and power of sales
- To pay for living expenses after losing a job
People who were turned away by banks can get assistance from the flexible private lenders. We have several in our network who will lend to individuals who couldn’t qualify for bank loans. This is possible because private lenders do not consider the same factors as banks do.
Rapid Financing from Private Lenders
It is difficult to speed up the bank mortgage approval process owing to strict government rules. But, private lender loans can get approved in as little as one day. Private lenders understand the varying needs of clients and can customise different mortgages to suit each client. This ensures that the loan package is acceptable and affordable to prevent crisis when payments are due. Our network of private lenders services each city and town in Ontario, including Barrie.
Private Hard Money Lenders
The term hard money lending refers to the type of asset you are talking about. A house is considered a hard asset. Hard money lenders look for low loan to value ratios.
Private Commercial Lenders
Private lending companies are one of the best alternatives if you are looking for a commercial lender. Commercial properties include retail plazas, rental buildings, office buildings and industrial building. We have commercial mortgage agent near you to discuss your requirements. Private lending companies usually require a couple of month to complete financing due to the amount if money involved.
Refinance My Mortgage
Refinancing your home loan usually does not require a lot of time. The cost to refinance mortgages is lower and faster since most of the documentation is already in place. Home mortgage refinance rates vary with each application. The main factors regarding the interest rates will be your credit score,income and the equity in the house.
At some point in time you will need to refinance mortgage loan
Information on Lenders in Barrie Real Estate Market
Barrie is in central Ontario on the shores of Kempenfelt Bay. It is a densely populated city within the most industrialised parts of Ontario. As a whole, Ontario has seen spiking real estate prices which is why more people are becoming private real estate lenders. Private lending is a great way for people in Barrie to eke more income. Ontario province is generally one of the best places to live in Canada.
Private Lending Companies
Private lending companies can provide mortgages for most commercial properties. Our commercial brokers and agents have an extensive background in financing. Our mortgage agents are near you and can come to office to discuss the options.
Hard Money Lenders
Hard money lending refers to the type of property that is to be used as collateral. A house is a hard asset since you can physically touch it. Hard money lenders will lend money on homes or other buildings but not on stocks and bonds.