- Introduction
- Why Brampton is a Great Place to Live
- Brampton Homeowners
- Different Types of Private Mortgage Lenders in Brampton
- Different Types of Private Loans in Brampton
- Private Lending Requirements in Brampton
- How Do Private Loans Differ from Mortgage Loans from Other Lenders?
- How Long Does It Take to Get Approved for a Private Loan?
- What Rates and Fees Do Private Lenders Charge?
- Mortgage Broker Store Can Direct You in Your Search for Private Mortgage Financing
Brampton is a great place to live and own a home, but getting a mortgage to buy a home in the city can be difficult. Many borrowers who apply for a mortgage from a bank will not be successful, as these lenders have very strict rules and regulations that disqualify most applicants. Homebuyers rejected by banks, credit unions, and other financial institutions can secure loans and their dream homes with private lenders in Brampton.
Why Brampton is a Great Place to Live
With neighbouring Mississauga to the West and within a short drive to Pearson International Airport, the Municipality of Brampton is ideally located for homeowners who want a neighbourhood with a more suburban feel along with convenient transportation and access to communities throughout the Greater Toronto Area (GTA), including the heart of Toronto.
Brampton, with its strong industrial base and ample local amenities, remains highly attractive to prospective homeowners, leading to rapid population growth, reaching 646,480 by the 2021 Canadian census. Combining urban conveniences with suburban comfort, Brampton’s appeal is evident to both current residents and potential buyers. Like much of Ontario, Brampton reflects the trend of escalating home prices and increased housing sales, especially notable in the Greater Toronto Area.
According to the July 2022 Brampton Housing Report, the city’s real estate market was the 3rd fastest-selling housing market in the GTA. With a frenzy of buyers wanting to tap into the robust real estate market, the average price of a Brampton home in July 2022 has grown to $1 Million, putting it on par with real estate markets in cities like Markham and Hamilton. This increase represents a roughly 3% increase in home prices from July 2021 to July 2022.
Brampton Homeowners
While current Brampton homeowners may be eager to benefit from newfound property appreciation by making use of their home equity. Homeowners can tap into their acquired home equity to take out a second mortgage, a home equity loan, a home equity line of credit (HELOC) and other types of loans to get the funding they need.
Home equity provides a quick source of substantial funds that homeowners can utilize for various purposes. Common uses include addressing immediate needs like medical bills or debts, as well as funding renovations, investments, or vacations.
In Ontario, individuals with low credit scores may find traditional banks inaccessible, but established private lenders, known as C Lenders, offer loans regardless of credit history. Mortgage Broker Store matches borrowers with lenders aligning with their financial goals, saving time and money, crucial for debt repayment and property investment in Brampton. With expertise in Brampton, Mortgage Broker Store offers direct financing if suitable lenders cannot be found for borrowers.
Different Types of Private Mortgage Lenders in Brampton
A mortgage lender is an individual, business or institution that offers loans to borrowers for the purpose of purchasing property. If someone wants to get a mortgage in Brampton, they will need to work with a mortgage lender. Not all mortgage lenders are the same, there are different types of mortgage lenders, each with its own requirements and criteria that must be met before they approve mortgage financing.
Most mortgage lenders define their criteria based on credit scores and household income. They will base an applicant’s suitability largely on overall income sources and creditworthiness.
Ontario-based mortgage lenders can be classified under three broad categories:
A Lenders- Banks represent this category of lenders. Mortgage approval can be quite rigorous. Lenders routinely subject applicants to tough mortgage stress tests to determine eligibility. Tighter mortgage stress rules as of June 1, 2021, have increased the difficulty of obtaining mortgage financing. Banks also prefer to use easy-to-calculate, substantial household income when approving mortgage loan parameters.
B lenders- Credit unions and trust companies comprise this category of lenders. While not quite as stringent as the banks when determining mortgage loan approval, these lenders still expect to see a credit score of at least 550 and above and prefer traditional, substantial yearly household income.
C Lenders- Private lenders make up the final category of lenders. Private lenders are most often sought after by borrowers with poor credit, as they can look beyond credit scores by assessing other criteria. This criterion is primarily determined by the appraised value of your home, the calculated Loan-to-Value (LTV) Ratio of your loan application, and, for homeowners, how much home equity they have.
Different Types of Private Loans in Brampton
Private lenders are able to offer a wide range of different loans to borrowers in Brampton, including:
- Bad Credit Mortgages
- Home Renovation Loans
- Bridge Financing
- Negotiating new terms on your mortgage
- Home Equity Line of Credit (HELOC)
- Home Equity Loan
- Debt Consolidation Loans
- Reverse Mortgages (open to those 55 years of age and over)
Private Lending Requirements in Brampton
Generally, a private lender will not lend beyond 75% LTV, meaning that the total value of all loans cannot exceed 75% of the current appraised value of your home. Borrowers must have over 25% equity in their homes to qualify for private mortgage financing. Leveraging more financial assets increases your approval chances for financing.
The location of your property is a factor for lenders when determining terms for private mortgage lenders in Brampton. In larger urban areas, homes often qualify for higher maximum LTVs due to lower perceived default risk by private lenders.
How Do Private Loans Differ from Mortgage Loans from Other Lenders?
Just as the degree of lending opportunities in Ontario varies, so are the types of mortgages borrowers can get.
Irrespective of loan type, private loans in Brampton differ significantly from bank and traditional lender loans in various aspects.
Private mortgage loans are usually structured as short-term loans. Private mortgage financing aims to fulfill immediate financial goals. Most private mortgage loan terms range from 6 months to 3 years compared to 5 to 25 years for mortgages with banks.
Private lenders prioritize other loan factors over poor credit, unlike traditional lenders, where credit heavily influences approval. People turn to private lenders after conventional rejections due to factors like low credit, self-employment, or non-residential property purchases.
How Long Does It Take to Get Approved for a Private Loan?
Private mortgage loans negotiate quickly and the application process is straightforward due to limited restrictions. Private lenders typically process loan applications within a week, contrasting with the several weeks traditional lenders usually take.
What Rates and Fees Do Private Lenders Charge?
When lenders mitigate risk while structuring mortgage financing, creditworthiness is assessed heavily. Private mortgage loans, for those with poor credit, are higher risk. Thus, rates may be slightly higher than bank rates.
Private lenders charge 7% to 12% interest rates and 3% to 6% fees on total negotiated mortgage costs. While they don’t base loan approvals on credit scores, they consider them when determining the interest rate for applicants.
Mortgage Broker Store Can Direct You in Your Search for Private Mortgage Financing
As an active real estate team in Ontario, Mortgage Broker Store has assisted hundreds of Ontarians in securing essential loans. With an extensive network of private lenders in Ontario and Brampton, they assist borrowers in finding suitable mortgage solutions.
After consulting by phone or email, they survey numerous private lenders, negotiating to find the optimal solution for you. This ensures borrowers secure the best qualifying loan, saving hundreds over their mortgage or home equity loan term.
If no suitable options exist, Mortgage Broker Store offers private mortgage financing tailored to borrowers’ finances and goals. For financing options, contact Mortgage Broker Store at (416) 499-2122 for a complimentary real estate consultation. They assist in understanding financing and loan options, ensuring readiness for applying for mortgages and loans in Brampton.