Ajax is a town that lies on the shores of Lake Ontario. This town was once considered a suburb of Toronto but now has a reputation of its own. According to areavibes, Ajax has a livability score of 81. That means it has an excellent assortment of amenities and housing opportunities. Private mortgage lenders in Ajax do brisk business because the town is an attractive location, close to Toronto, with a strong local economy. These positive features contribute to the town’s strong real estate market. The real estate situation and location are good reasons for private lenders to approve loans on Ajax homes.
Second Mortgage Options Through Private Mortgage Lenders in Ajax
These numbers are encouraging. They have inspired some Ajax homeowners to consider the option of taking out a second mortgage by tapping into existing equity. It’s the same situation for people in Oshawa, Scarborough, and Markham.
An Ajax homeowner needs strong credit and substantial household income to apply for a second mortgage through traditional banks and credit unions. There are other stringent requirements, including:
- An investment or savings statement that is current from within the last 90 days.
- A T1 General Income Tax and Benefit Return. This summarizes tax payable, deductions and income.
- A bank or credit union may also need to see additional income sources from investment and rental income.
Poor Credit and Private Second Mortgage Loans Options
What if you have poor credit? For an Ajax homeowner that has damaged credit, approaching an Ajax private lender to negotiate a private second mortgage loan is a solid option.
Types of Lenders
Making a decision involving your equity needs to be taken seriously. The mortgage industry classifies applicants based on several criteria:
- Creditworthiness
- Household income
- The ability to pass mortgage stress tests
- Any additional financial assets that supply further leverage
The types of lenders fall into one of three categories.
- A Lenders– Banks are classified as A lenders. Their requirements include high credit scores and verifiable income. Borrowers are put through mortgage stress tests to determine eligibility. These mortgage stress tests are holding at the current rate. This is in spite of the fact The Bank of Canada raised its policy interest rate in early September 2022.
- B Lenders- Credit Unions/Trust companies are classified as B lenders. They offer slightly less stringent mortgage criteria. However, traditional income is preferred over money made freelancing or through contracts.
- C Lenders– Private lenders are classified as C lenders. They base mortgage financing on criteria beyond credit and salary amount and type. The appraised value of your home, its location, the current condition of the property, and the degree of the existing equity in your home are all used.
Types of Private Second Mortgage Loan Options
Private second mortgages are an option for Ajax homeowners with credit issues. Individual financial circumstances dictate the best choices.
Private loan second mortgage loan options include:
- Home Equity Loans
- Home Renovation Loans
- Refinancing options
- Debt Consolidation Loans
- Second mortgage
Private lenders determining the amount of private mortgage financing look at a number of specific criteria. They also calculate the Loan-To-Value (LTV).
Generally, they will lend up to a maximum of 75% LTV which is up to 75% of the appraised value of your home. The numbers may be lower for properties in outlying areas with a typical standard LTV of 65%
These private lenders also look at the following measures:
- A current appraisal of your home. This document is central in calculating the terms of a second mortgage.
- Your home’s current condition. Recent renovations and potential structural issues like mould, water damage, or foundation problems are considered.
- The location of your home. This is a central factor in any type of real estate transaction.
- The existing equity. Generally, a private lender will need to see at least $70,000 in existing equity in order to negotiate a second mortgage.
Private Mortgage Lenders in Ajax and the Economy
The CPA Canada Business Monitor (Q2 2022) recently reported that optimism over Canada’s economy has dropped to 16% from 40 in Q1. That indicates some businesses are struggling and could use the services of private mortgage lenders in Ajax.
The survey was carried out by the Chartered Professional Accountants Association. It listed the following perceived challenges as of August 2022.
- Twenty-nine percent of the respondents listed the rise in inflation as the number one challenge.
- Another 14% highlight supply chain issues as the number one problem.
- Employee development, retention, and recruitment were listed as the number one obstacle for the economy by 8%.
Another recent report from CPA Canada was called The Thriving or Surviving Study. It reported that about two-thirds of Canadians, or 68%, who had debt were concerned.
The same report says that one in four Canadians carries a credit card balance from the past year. Not managing your debt properly can adversely affect your credit score. Private mortgage lenders in Ajax keep tabs on these trends and stats to better serve their clients.
Ajax Market Stats
Ajax MLS® stats are favourable. The average sold price in the area was still good at $1 million as of May 2024. Even though there’s been a yearly drop in prices of 0.9%, Zolo reports there have been 230 listings in the last 28 days.
Ajax is located 20 minutes away from Toronto. Based on a census done in 2024, the population of the town is 131,054 people.
Mortgage Loan Rates and Fees Charged by Private Lenders
The banks charge competitive rates based on strong credit, successful mortgage stress tests, and several income requirements.
Private lenders charge slightly higher mortgage loan rates to offset the risks of helping clients with poor credit. Generally, these rates range from 8% to 13%, depending on an Ajax homeowner’s specific financial picture. Fees typically range between 3% and 6% of the total cost of the mortgage loan.
Mortgage Broker Store Will Direct You to Private Mortgage Options
Are you an Ajax homeowner or a borrower looking for mortgage financing? Don’t let credit issues prevent you from buying a home or leveraging your existing equity to pay expenses.
Mortgage Broker Store has access to a broad network of private lenders in the Ajax area. Jonathan Alphonso and our team specialize in connecting clients with the perfect private lender tailored to their needs. Whether you’re seeking a first mortgage, second mortgage, or specialized loan, we’ve got you covered. Call 416-499-2122 or email ron@mortgagebrokerstore.com to start your journey toward financial solutions today!
- Introduction
- Second Mortgage Options Through Private Mortgage Lenders in Ajax
- Poor Credit and Private Second Mortgage Loans Options
- Types of Private Second Mortgage Loan Options
- Private Mortgage Lenders in Ajax and the Economy
- Ajax Market Stats
- Mortgage Loan Rates and Fees Charged by Private Lenders
- Mortgage Broker Store Will Direct You to Private Mortgage Options