Are you a resident of Barrie, Ontario looking for a mortgage loan but struggling to get approved by traditional banks? Private mortgage lenders may be the solution for you. These non-bank lenders offer alternative options for borrowers who may not meet the strict qualifications of traditional banks. In this article, we will explore the benefits of working with private mortgage lenders in Barrie and give you the information you need to make an informed decision about your mortgage financing options.
Private Lender Mortgages in Barrie
Private mortgage lenders in Barrie offer alternative financing options for borrowers with poor credit, self-employed individuals, and those who may not have a significant down payment.
According to a report by the Canadian Association of Private Lenders, private mortgage lending in Ontario has seen a significant increase in recent years, with the total value of private mortgages in the province rising from $1.2 billion in 2015 to $2.8 billion in 2018.
In Barrie, specifically, private mortgage lenders have become a valuable resource for borrowers looking to purchase or refinance a property. According to the Canadian Real Estate Association, the average home price in Barrie was $608,090 in 2020, which can be difficult for many borrowers to afford. Private mortgage lenders can provide loans for borrowers who may not have the 20% down payment required by traditional banks for uninsured mortgages.
It’s also worth mentioning that private mortgage lenders often offer more flexible terms and conditions than traditional banks. They may also have more lenient credit requirements and can often approve loans faster than banks. However, it’s important to note that private mortgage loans tend to have higher interest rates and fees compared to bank loans.
Approval Criteria for Private Lender Mortgages
When it comes to private mortgage lending in Barrie, Ontario, the approval criteria may vary from lender to lender. However, there are some general guidelines that borrowers can expect to be considered when applying for a private mortgage loan.
- Credit Score: Private mortgage lenders typically have more lenient credit requirements than traditional banks. Most private lenders won’t reject an application due to a low credit score. In general, a credit score of 620 or higher is considered acceptable by most banks, but most private lenders can accept any score.
- Income and Employment: Private mortgage lenders want evidence of the borrower’s income and employment status. Self-employed individuals may have difficulty getting approved by traditional banks, but private mortgage lenders may be more open to these borrowers. Many private mortgage lenders will accept a variety of income sources, including employment income, rental income, and pension income.
- Property Type and Location: Private mortgage lenders may have restrictions on the type of property they will lend on. Some lenders may only lend on residential properties, while others may lend on commercial properties as well. Additionally, some private mortgage lenders may have restrictions on the location of the property. For example, they may only lend on properties within a certain area or within a specific city. Lenders generally prefer to lend in cities like Barrie, with a population of over 100,000.
- Down Payment: Private mortgage lenders may require a larger down payment than traditional banks. Typically, a down payment of at least 25% is required by most private mortgage lenders. While the down payment requirement is strict, most other issues banks prioritize can be overlooked.
- Loan-to-Value Ratio: Private mortgage lenders may also have stricter requirements for LTV ratios than traditional banks. LTV ratio is the amount of the loan divided by the value of the property. For example, if a property is worth $500,000 and the borrower is requesting a loan of $350,000, the LTV ratio is 75%. Some private mortgage lenders may only approve loans with LTV ratios of 75% or less, while others may be more flexible.
It’s worth mentioning that some private mortgage lenders may have additional requirements or criteria that borrowers must meet to be approved for a loan. Therefore, it’s important to research and compare different private mortgage lenders to find the one that best suits your needs.
Reasons for Needing a Private Lender Mortgage
There are several reasons a person in Barrie might need a private lender mortgage. Some of the most common reasons include:
- Poor credit: If a borrower has a low credit score or a history of credit issues, they may not qualify for a traditional mortgage from a bank or credit union. Private lenders often have more lenient credit requirements and may be more willing to approve a loan for a borrower with poor credit.
- Self-Employment: Self-employed individuals often have a harder time getting approved for traditional mortgages. Banks and credit unions typically require a two-year history of consistent income, which self-employed individuals may not have. Private lenders may be more flexible in this regard.
- Quick financing: Private lenders typically approve and fund a loan much faster than traditional lenders, making them a good option for borrowers who need financing quickly.
- Power of Sale or Foreclosure: If a person is facing power of sale or foreclosure on their home, a private lender mortgage may be able to provide the financing needed to bring the mortgage current and save the home.
- Non-conventional properties: Private lenders are often more flexible in terms of the types of properties they will finance, including non-conventional properties like multi-unit buildings, mixed-use properties, and commercial properties.
How to Refinance a Mortgage in Barrie
Refinancing a mortgage or getting a second mortgage with private mortgage lenders in Barrie can be a bit different from the process with traditional lenders. Here are some steps to help you navigate the process:
- Gather your documents: To apply for a refinance or second mortgage with a private lender, you’ll need to provide some financial information and documentation. This may include proof of income, such as pay stubs or tax returns, as well as proof of ownership of the property you’re looking to mortgage.
- Shop around: Compare rates and terms from a few different private lenders to ensure you’re getting the best deal. Make sure to consider not just the interest rate but also the fees associated with the loan.
- Review the terms: Before signing any agreements, make sure you understand the terms of the loan, including the interest rate, repayment period, and any fees or penalties.
- Get a property appraisal: Private lenders may require a property appraisal to determine the value of the property being mortgaged.
- Close the loan: Once you’ve found a lender with terms that work for you, you’ll need to sign the loan documents and provide any required down payment or closing costs.
It is important to seek professional advice before deciding on a refinance or a second mortgage, as these financial products can have a significant impact on your long-term financial well-being.
Information on Lenders in the Barrie Real Estate Market
Barrie, Ontario, is a city located in the central part of the province, on the shores of Kempenfelt Bay on Lake Simcoe. It is part of the Greater Golden Horseshoe region, and has a population of over 150,000 people.
The local real estate market in Barrie had been growing in recent years, with an increase in both home sales and home prices. The median home price in Barrie had increased by nearly 10% year-over-year, according to the Canadian Real Estate Association. This was likely due to a combination of factors, including strong population growth, a low unemployment rate, and low-interest rates.
However, the COVID-19 pandemic has impacted the real estate market in Barrie and many other cities. The pandemic has led to a decline in economic activity, and many people have lost their jobs or experienced reduced income. This has resulted in a decline in the demand for housing, leading to a decrease in home sales and a decrease in home prices.
Despite the current challenges, there are still factors that attract private mortgage lenders to offer mortgages in Barrie. One of the main reasons is the growing population which creates demand for housing, leading to an increase in home sales and prices in the long run. Also, the local economy is strong, and the unemployment rate is low, which shows that people have the ability to pay their mortgages. Furthermore, the city has a diverse economy with a mix of manufacturing, retail, healthcare, and education sectors which provide stable employment opportunities.
Additionally, the city has a good mix of property types, such as single-family homes, townhouses, and condos, which provide a range of options for potential buyers and investors. Furthermore, the proximity to Toronto and other major cities in the region makes it an attractive location for real estate investment, which also attracts private mortgage lenders to offer mortgages in Barrie.
Help With Getting A Private Mortgage Lender in Barrie
Many people turn to mortgage brokers when they need help getting a private mortgage. Mortgage Broker Store is both a direct private lender and mortgage brokerage firm that specializes in providing private mortgage loans for a wide range of borrowers. They have an experienced team who can help you find the right lender and loan product to meet your needs.
They have access to a wide network of private lenders, which include Mortgage Investment Corporations (MICs) and individual investors, that allows them to find the best rates and terms for their clients. They also offer a variety of loan products, including refinance, second mortgages, and home equity loans, to help borrowers achieve their financial goals.
They offer a personal approach and assist their clients through the mortgage process. They are dedicated to providing excellent customer service and strive to make the mortgage process as stress-free as possible for their clients. You can contact their team directly at 416-499-2122 or by email at email@example.com