The government imposes strict rules on Canadian banks, which make people lean more toward private lenders who are not under so many restrictions. Most of the private mortgage lenders in Burlington specifically service difficult to place mortgages that the bank could not accept. Burlington private lenders do not have to abide by the same rules as banks. If you were turned down by banks, private lenders may be able to provide the loan you need.
Mortgages from Private Lenders
Burlington private lenders loan out money as registered mortgages that are secured by real estate. A private lender is allowed to sell the property if the agreed mortgage fees are not paid; according to the Ontario Mortgage Act. Usually, a private lender will give $20,000 or more for one year (unless the client requests an extension). For riskier loans; where the applicant has no income or is seeking a second mortgage, fees charged tend to be higher than those for a regular bank loan. This is to protect the lender’s interests by showing that they have a chance to recoup their investment from the proceeds of a power of sale. Private lenders gain profits by investing in real estate, and Burlington is important to them as it has some of the highest appreciation rates in the country.
Approval Criteria for Private Lender Mortgages
Private lenders focus on existing debts and the current value of the property when making a lending decision. Banks rely on credit score when judging mortgage applications but this is not a concern for private lenders. They will calculate loan to value ratio, a metric that helps them determine which are worthy investments. To calculate property LTV, you need to divide the value of existing mortgages by the market value of the house. For example, you have a home whose market value is $1,000,000 and $800,000 in mortgages it will have 80% LTV which means you qualify for a private lender mortgage. Most private lenders in Burlington will not invest in properties with a loan to value ratio greater than 85%. A value that is higher than 85% indicates too little equity in a property for the lender to benefit.
Reasons for Needing a Private Mortgage
When applying for a private lender mortgage, you will be asked to give your reasons for needing the money. Private lenders are quite lenient and accept most reasonable explanations for needing mortgages. The main reasons for needing a private mortgage in Burlington include:
- For living expenses after being laid off work
- To stop a foreclosure or power of sale
- To pay tuition fees for university or college
- To pay credit card interest
- To pay for home repairs or renovations
The people who cannot get a low-interest bank loan can get private lender assistance. Our private lender network is available to issue a private mortgage in Burlington to individuals who were turned away by the banks. Private lenders are more flexible, understanding and lenient compared to banks and they can, therefore, accommodate borrowers with low credit.
Fast Financing from Private Lenders
Major banks in Burlington are required to follow a long, complicated mortgage approval process. It is impossible to speed up the banks’ mortgage approval process and this is too bad for people who need to get money urgently. Private lenders do not follow the same rules and can, therefore, speed up the process. The lenders of private mortgages are flexible to the clients’ needs and are capable of customising loans to each customer’s desires. It can even take as little as one day to get the funding. Our network loans on real estate in every town and city including Burlington, Ontario.
Information on Lenders in Burlington Real Estate Market
Burlington is in Ontario, a province in Southern Canada on the border with the US. The area has witnessed growth in the real estate market over the past couple of years. Many people in Burlington are turning to private lending to generate spare income from the booming real estate market. Ontario as a whole is well known as Canada’s economic powerhouse and it is highly regarded as one of the most desirable places to stay in Canada.