Many mortgages are being turned down due to strict government control n banks in Canada. Starting in October 2016, more people will be turned down by banks considering the requirement that people qualify for higher interest rates. It is also a known fact that you will not be approved for a bank mortgage with a credit score below 600 points. Private mortgage lenders in Fort Erie have a less strict mortgage approval procedure owing to reduced government oversight. This enables them to service mortgages when banks are unable to.
Fort Erie Private Lenders
A private lender in Fort Erie is an individual or business with an interest in real estate. Fort Erie real estate market has been steadily growing for a long time now and this is attractive to private lenders. Many private lenders specialise in Fort Erie properties as well as surrounding areas. They typically give out loans as registered mortgages on a property for one-year terms. You will receive $20,000 or more but note that a lender is allowed to sell your property if you cannot pay fees as agreed. This is according to the Ontario Mortgage Act as a way of protecting private lenders from serial defaulters.
Approval Requirements for a Private Mortgage
The requirements of private lenders are very different from banks when considering mortgage applications. The main concern for Fort Erie private lenders is a home’s market value and debts secured against it. Lenders rely on a metric called loan to value ratio which is equivalent to the value of all mortgages on a home divided by its market value. Most private mortgage lenders will lend up to 85% LTV on residential properties, and only in very rare cases; do they issue loans to 90% LTV. Private mortgage lenders in Fort Erie are not bothered by credit history but they are also sensitive to risk and will avoid lending on properties with too much debt already. In the interest of other lenders, the Ontario Mortgage Act requires that the first mortgage holder be paid first before the second and third respectively, in the event of a power of sale. If they are not careful, some private lenders may lose money loaned to homes with a very high loan to value ratio.
Reasons for Getting a Private Lender Mortgage
The lender will ask your reasons for needing the money but don’t worry; they are very lenient and will accept any reasonable answer. Unlike banks, private lenders understand that their clients have diverse needs which cannot be addressed by a common mortgage agreement. They are ready to listen to your needs and come up with a tailored mortgage solution. The common reasons why people need private funding are:
- To pay for higher education
- To pay emergency medical bills
- For debt consolidation
- To renovate or repair a home
People applying for a private lender mortgage are mostly those who have been rejected by banks. This is often because of poor credit or low income. We specialise in offering loans to people in these circumstances. We also help our clients repair their credit to ensure that they can easily get a bank loan in future. We have a huge network of lenders who service Fort Erie and surrounding cities. Our relationship with the major lawyers and real estate firms in Fort Erie make it possible to provide on strict deadlines. This is particularly helpful for emergencies like a power of sales, foreclosure or accident.
Information on Private Mortgage Lenders in Fort Erie
Like several cities in Ontario, Fort Erie is experiencing growth in sales and prices of residential properties. This is attractive to people seeking for a stable market and unlike some parts, of the country housing in Fort Erie is deemed as affordable as the price increase is in tandem with growth i income. Fort Erie’s real estate market is known to be among the most stable in Canada and this coupled with a healthy economy make Fort Erie, Ontario highly rated in quality of life ratings.