The government of Canada has banks operating under strict regulations, which unfortunately leave many residents seeking loans out in the cold. Mortgage borrowers who could not meet the banks’ criteria for loan approval must seek alternative funding only provided by private mortgage lenders in Caledon. These are companies or individuals who are not under so much government control, allowing them to service hard to place mortgages that the banks rejected. Banks can only issue mortgages to individuals with 600 credit score points or more. People who cannot meet the strict approval criteria for loans by banks can turn to private lenders for help.
The private mortgage lenders in Caledon, Ontario will give money but only in form of registered mortgages. A registered mortgage in the city means that the lender can sell property used as security if the borrower is unable to honour the deal. You can get as little as $20,000 for one year (unless you request otherwise). For riskier second mortgages or loans to people without an income, the lenders charge higher fees than those for bank loans. Private lenders generate income by investing in real estate and the Caledon market is attractive as it has some of the highest real estate appreciation rates in the country.
To give a loan, private lenders focus other market value and existing debts on a home. This is a huge difference compared to banks, which look to credit score to inform their decision. Rather than credit score, private dealers calculate a metric known as loan to value (LTV) ratio to determine if a property is a worthy investment. LTV on a property is calculated by dividing the total of existing mortgages by the market value of a house. If a home is worth $1,000,000 for example and has debts worth 800,000 the LTV, will 80%. Most of the private lenders in Caledon do not loan to the residential real estate with an LTV that is more than 85%. It is already a big risk loaning to people with bad credit so private lenders generally avoid properties with high LTV as it will not translate to profits for them even if they sell a property. The Ontario Mortgage Act requires the first mortgage lender to be paid first, before the second and third respectively and so there must be sufficient equity in a property to get you a reasonable mortgage amount.
While applying for a mortgage with a private lender you will be asked to state why you need the money. Thankfully, private lenders are more lenient than banks; accepting any reasonable response. Some popular ones include:
Individuals who cannot get a low-interest bank loan are the target clients for private lenders. Our network of lenders in Caledon can provide mortgages to individuals who have been turned down by banks.
Main banks of Ontario must follow a rigorous, time-consuming mortgage approval process and there is no way you can possibly speed it up. This can be an issue when faced with property sales in urgent need for funds. The only solution is private lenders who can provide funding in 24hours. Our private lender network can offer loans against real estate in all cities and towns of Ontario.
Caledon’s real estate prices have been on a steady rise since 2012 and this is understandable considering the high prices of properties n Ontario Province. Ontario experienced double-digit growth in real estate prices and that is why people seeking extra income are turning to private real estate lending. Ontario is a great real estate market bearing in mind that it is considered one of the best places to live. It is also Canada’s economic powerhouse meaning that the real estate prices will continue to increase.