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:
1. Recent Appraisal of Your Property:
As a second mortgage loan will be leveraged against your home, the appraised value is paramount in any private loan calculations.
2. Degree of Equity in Your Property:
Private lenders assess the degree of equity in your home. Compared to what is still outstanding on your first mortgage, this equity will determine the terms and amount of a second mortgage loan.
3. All Sources of Monthly Income:
Unlike banks, private lenders consider all sources of monthly income, including freelance, contract-based, investment, and self-employed income.
4. Additional Financial Assets:
Any assets beyond your home can help leverage the loan and will be considered by private lenders when negotiating loan terms.
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:
1. 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.
2. 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.
3. 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.
4. Overall Condition of Your Property: The condition of your house, used as collateral for the loan, is important. Issues like water damage, mould, or foundation problems will be assessed.
5. 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 3-6 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.
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.