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 lenders in Barrie prefer giving loans as registered mortgages against 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. 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.
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.
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:
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.
It is impossible to speed up the bank mortgage approval process owing to strict government rules. You can get approved in as little as one day for a private lender loan. 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.
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.