Banks in Canada are under strict government control, which, unfortunately, turns away many people who are in need of loans. These people would rather work with private lenders who can service those hard to place mortgages that banks wouldn’t accept. Private mortgage lenders in Ajax do not have to follow the same rules as banks and can, therefore, give people a chance to leverage the equity in personal assets to meet financial obligations.
Mortgages from Private Lenders
Private mortgage lenders in Ajax prefer loaning out their money in form of a registered mortgage. According to the Ontario mortgage act, a holder of a registered mortgage may sell the property acting as security in an attempt to recover their investment. A private mortgage may starts from $20,000 upwards and you are expected to repay in 12 months. It is possible to negotiate longer terms with the lenders to make monthly loan payments more affordable. Riskier mortgages like second mortgages or where the borrower has no income tend to attract higher fees compared with traditional bank loans. Private lenders profit from the real estate business and this is why they love servicing Ajax, where the property appreciation rates are quite high.
Approval Requirements for Private Mortgages
Private mortgage lenders in Ajax are keen to learn the debts and current market value of a property. This is much unlike banks that base lending decisions on credit score. Dividing the total debts by the current price of a property gives a metric known as loan to value ratio. Private lenders will only loan up to 75% LTV on a property. A value that is too high indicates that there is too little equity left with the borrower, for a private lender to benefit from. These lenders may not be concerned about credit score but they are very sensitive to risk and avoid any properties with very many debts.
Reasons for Needing a Private Mortgage
A private lender will ask why you need the loan but there is no cause for alarm. This information is mainly for record-keeping among private lenders unlike banks who might use the information to inform their lending decision. Private lenders are very lenient and will accept basically any explanation given for needing the loan. The most common explanations for needing a loan include:
- To stop power of sale or foreclosure
- To pay tuition fees for college or university
- To pay off high-interest credit card debt
- For living expenses after being laid off work
- For home repairs or upgrades
People who do not qualify for bank loans are the main clients of private lenders. Our network in Ajax is available to provide private mortgages to people in need. This way, a poor credit score is not a deterrent for people to accomplish various financial obligations.
Quicker Financing from Private Lenders
Banks must adhere to a stringent process before approving mortgage applications. It is a tedious process that is impossible to speed up no matter how urgently funding is needed. Private lenders do not face the same restrictions and for that reason, they are able to provide funding in as little as 24 hours. This is especially important when there is a power of sale situation to resolve or emergency fees to be paid. Private lenders are in fact so flexible; they can design custom loan solutions for different clients. Our private mortgage lenders in Ajax can also loan to people in other cities and towns across Ontario.
Information on Lenders in the Ajax Real Estate Market
Ajax is part of the Greater Toronto Area, earning its name from the HMS Ajax, a Royal navy cruiser that served in the Second World War. The area has grown considerably since the 1990’s into a major bedroom community. People working in Toronto and surrounding areas; commute daily from their residences in Ajax. Many people in Ajax are turning into private real estate lenders as a way of generating extra income. Ontario Province is an economic hub and Ajax lies so close to Toronto, one of the places with high real estate prices. Generally, Ontario is attractive to real estate lenders owing to the recent double digits increase in property prices in the last few years.