Canadian banks are heavily regulated and have very strict mortgage approval requirements. For people who have been turned down by banks, using private lenders in Kitchener is a great solution. Private lenders are not subject to the same level of government oversight. As of Oct 17, 2016 the government put forth new rules for bank mortgages requiring them to have people qualify for higher interest rates. Due to these new rules many additional people will be turned down for mortgages. Private lenders in Kitchener can service people who have been turned away by banks.
Kitchener’s private lenders are people or companies that invest in real estate to generate a profit. Lenders see Kitchener as a good investment due to its closeness to Toronto and its affordable housing prices. Lenders that invest in Kitchener can loan a minimum of $20,000 for one year terms (unless otherwise specified). The loan will be registered as a mortgage on the property in Kitchener. These mortgages are secured debts, meaning that the building may be sold if the borrow refuses to pay the agreed upon fees.
While banks prioritize credit scores, private lenders prioritize the sales value of the property and the amount of debt currently secured to the property. Private lenders calculate a metric called a Loan to Value Ratio (LTV) and use it when deciding to lend on a property. To calculate LTV, you must divide the secured debts on the property by the selling price of the property. To give an example, a condo unit is valued at $100,000 and has $40,000 in mortgages which makes the LTV 40%. Lenders in Kitchener will lend on properties with a LTV no greater than 85%.
When asking a private lender for a mortgage, you will need to provide the reason why the mortgage is needed. Many reasons for needing financing are acceptable. Some commonly given reasons include:
Usually people seek out private lenders after being turned down by their bank. Private lenders in Kitchener specialize in dealing with people who can’t qualify at banks. Our private lenders also create a plan to repair your credit in the future and help you qualify for low-rate financing.
Canadian banks have a detailed mortgage approval process with many steps, which can take a long time to complete. The banks cannot change their procedures and will not respond to requests to provide financing quickly. Many time sensitive real estate deals fall apart due to not having financing provided quickly enough. When dealing with time sensitive scenarios, private lender financing is more effective than bank financing. The private lenders we deal with can provide financing in one day if needed. We have a large lender network across Ontario, many of which invest in Kitchener.
Kitchener is located west of Toronto and is also immediately beside the city of Waterloo. Kitchener is a popular choice for new families due to the affordable real estate and availability of jobs. Real estate in Kitchener is in a state of low supply and high demand, which makes it attractive to investors. It is common for people in Ontario to refer to Kitchener and Waterloo together as “Kitchener-Waterloo”. Kitchener is part of the Waterloo region which is known for its technology industry.