Bradford offers many positives for a potential home buyer. With outdoor activities, local amenities, and top schools, residents enjoy a relaxed lifestyle. On the Holland River, Bradford remains an easy commute from the GTA and central Toronto. Private lenders are here to provide options for those looking to live in Bradford. Private lenders in Bradford consider various criteria beyond credit to negotiate second mortgage options.
Private lenders in Guelph offer unmatched speed and flexibility, outpacing traditional banks in the dynamic real estate market. Quick financing is often essential to avoid a power of sale or to seize timely investment opportunities.
Private lenders in Guelph stand out with their rapid approval process and swift loan disbursement, setting a benchmark in the mortgage industry. While conventional banks may take weeks to process mortgage applications due to detailed credit checks and bureaucratic procedures, private lenders in Guelph can complete the entire process within days. By prioritizing property value and debt ratios over exhaustive credit checks, they ensure fast funding approvals.
In Guelph’s competitive real estate market, quick funding can make all the difference. The efficiency of private lenders can be a game-changer in securing dream homes or meeting urgent financial needs.
Criteria Used by Bradford Private Lenders for Structuring Private Mortgage Financing:
Private lenders can look beyond poor credit and structure second mortgage loan options based on several key criteria:
- Loan-to-Value (LTV): When structuring privately secured mortgage loans, private lenders calculate the LTV based on the current appraised value of your property. Given the high-risk nature of private second mortgage loans, lenders typically limit financing to 75% of your home’s appraised value. Calculate your LTV by starting with all existing mortgages plus all proposed mortgages, which are divided by the appraisal value.
- Overall Debt Ratio: Private lenders consider household debt and can offer loans with higher debt ratios than banks allow. It’s best to pay down high-interest debt and maintain a lower debt ratio.
- Appraised Value of Your Property: A recent appraisal is crucial for any meeting with a private lender, as it will form the basis of loan calculations and terms.
- Overall Condition of Your Property: The condition of your house, which is used as collateral for the loan, is important. Issues like water damage, mould, or foundation problems will be assessed.
- Location of Your Property: Location is always vital in real estate transactions. The value and desirability of your property’s location will influence loan terms.
What Types of Private Loan Options Are There?
- Home renovation loans: Utilizing equity for home renovations can cover necessary fix-ups, ultimately increasing the property’s value.
- Home Equity Line of Credit (HELOC): A revolving line of credit leveraged against your home using existing equity. Homeowners can draw on the funds as needed, with only interest payments required.
- Home Equity Loan: A lump sum loan based on your home’s equity, with monthly payments required.
- Bridge financing: Short-term financing options typically negotiated for 3 to 6 month terms.
- Help to put the first mortgage back in good standing: Accessing home equity through a second mortgage can help pay off arrears or associated legal fees, ensuring the first mortgage is in good standing.
- Debt consolidation loans: These loans enable homeowners to merge all debt payments into one manageable monthly payment, helping to restore credit when payments are made reliably.
Costs Involved in A Private Lender Mortgage
Private mortgage lenders are more expensive than any other type of mortgage lender. There are no standard costs, but most lenders try to offer rates and fees that are competitive with other lenders. Here are some costs to expect as of December 2024:
- Interest Rates: Typically between 8% and 12%
- Lender Fees: Usually between 2% and 4%
- Broker Fees: Set to match the lender fees, which are usually 2% to 4%
- Appraisal Fee: $500 + HST for single-family homes in Ontario. Larger or unconventional properties will cost more.
- Legal fees: These range from $1,000 to $3,000, depending on the mortgage request.
How LTV Affects Costs
The Loan-to-Value (LTV) ratio plays a big role in determining your costs. Simply put, the closer your mortgage is to the lender’s maximum allowable LTV (typically 75%), the higher your rates and fees. Lenders see higher LTVs as riskier, so they charge more to compensate. Calculate this ratio by taking all existing mortgages plus all proposed mortgages and dividing by the appraisal value.
Here’s an example of how costs can vary based on LTV:
| LTV (%) | Interest Rate (%) | Lender Fees (%) | Broker Fees (%) |
| 50% | 8% | 2% | 2% |
| 60% | 9% | 3% | 3% |
| 70% | 11% | 3.5% | 3.5% |
| 75% | 12% | 4% | 4% |
What You Need to Know About Fees
Your mortgage amount includes specific fees, such as lender, broker, and legal, which are included in your mortgage amount and count toward the LTV. If your request is already at 75% LTV before fees are added, you might exceed the limit and not get approved. Appraisal fees are typically not included in the LTV and are paid by the borrower directly after the inspection is performed.
A good mortgage broker will provide documents that clearly outline all costs related to the mortgage, and whether or not they are included in the mortgage amount. Reviewing the costs with your broker is always a good idea to make sure they fit your financial plan.
When applying for private mortgage lenders in Ontario, you must state why you need the money. Private lenders are usually lenient and will accept the most reasonable responses.
Some popular responses include:
- To pay off high-interest credit card debt
- To pay for home repairs or renovations
- To cover living expenses after a work layoff
- To stop a power of sale or foreclosure
- To pay tuition fees for college or university
In many cases, borrowers approach private lenders for mortgages and loans to help consolidate existing debt or prevent property loss through foreclosure or power of sale proceedings. Many people juggle multiple types of debt at once. For example, as noted above, you might have a mortgage and a significant amount of credit card debt or outstanding student loans. Since mortgage and student loans are owed to different collectors, you may have to keep track of multiple monthly debt payments. A mortgage from a private lender can be enough to pay off what remains on your mortgage and your student loans. Upon settling individual debts, you’ll have a monthly payment to your lender, simplifying your financial obligations. Many borrowers find this an easier way to manage debt.
People who cannot qualify for a low-interest rate loan at a bank are the kind of clients that private lenders seek out. Our private lender network can provide mortgages to people turned down by banks. Most private lenders will offer a rate between 8% to 12%.
Bradford Stats
With a population of roughly 24,000, Bradford offers the best of both worlds: a small-town community feel with all the amenities that a larger metropolis can provide within a short distance. New housing developments in the Bradford area indicate the draw the area has for many potential homeowners.
Bradford’s property values have appreciated, mirroring other province areas throughout 2020 and mid-2021. Appreciation has been in the double digits. Bidding wars for limited housing inventory have resulted in offers well above the asking price on Bradford properties.
The latest real estate numbers from the Bradford July 2024 housing report continue to impress. The average house price of a single detached Bradford property has increased to $1.1 million, representing a 30.1% year-over-year increase since July 2020.
Mortgage Brokers Store Can Point You in the Direction of Private Mortgage Financing
With expertise in private lending, Mortgage Broker Store can advise Bradford homeowners on suitable mortgage options. We can connect you with Bradford area private lenders to negotiate various loan options based on your financial criteria.