In Brampton, individuals with low credit scores may find traditional banks inaccessible, but established private lenders, known as C Lenders, offer loans regardless of credit history. Mortgage Broker Store matches borrowers with lenders aligning with their financial goals, saving time and money, which is crucial for debt repayment and property investment in Brampton. With expertise in Brampton, Mortgage Broker Store offers direct financing if suitable lenders cannot be found for borrowers.
Home equity provides a quick source of substantial funds that homeowners can utilize for various purposes. Common uses include addressing immediate needs like medical bills or debts and funding renovations, investments, or vacations. Learn more about private mortgage lenders in Brampton by reading on.
Different Types of Private Mortgage Lenders in Brampton
A mortgage lender is an individual, business, or institution that offers loans to borrowers to purchase property. If someone wants to get a mortgage in Brampton, they will need to work with a mortgage lender. Not all mortgage lenders are the same; there are different types of mortgage lenders, each with its own requirements and criteria that must be met before they approve mortgage financing.
Most mortgage lenders define their criteria based on credit scores and household income. They will base an applicant’s suitability largely on overall income sources and creditworthiness.
Ontario-based mortgage lenders can be classified under three broad categories:
- A Lenders- Banks represent this category of lenders. Mortgage approval can be quite rigorous. Lenders routinely subject applicants to tough mortgage stress tests to determine eligibility. Tighter mortgage stress rules as of June 1, 2021, have increased the difficulty of obtaining mortgage financing. Banks also prefer to use easy-to-calculate, substantial household income when approving mortgage loan parameters.
- B lenders- Credit unions and trust companies comprise this category of lenders. While not quite as stringent as the banks when determining mortgage loan approval, these lenders still expect to see a credit score of at least 550 and above and prefer traditional, substantial yearly household income.
- C Lenders- Private lenders make up the final category of lenders. Private lenders are often sought after by borrowers with poor credit, as they can look beyond credit scores by assessing other criteria.
Different Types of Private Loans in Brampton
Private lenders can offer a wide range of different loans to borrowers in Brampton, including:
- Bad Credit Mortgages
- Home Renovation Loans
- Bridge Financing
- Negotiating new terms on your mortgage
- Home Equity Line of Credit (HELOC)
- Home Equity Loan
- Debt Consolidation Loans
- Reverse Mortgages (open to those 55 years of age and over)
What Sets Private Loans Apart from Traditional Mortgage Loans?
Just as the degree of lending opportunities in Ontario varies, so are the types of mortgages borrowers can get. Irrespective of loan type, private loans in Brampton differ significantly from bank and traditional lender loans in various aspects.
Private mortgage loans are usually structured as short-term loans. Private mortgage financing aims to fulfill immediate financial goals. Most private mortgage loan terms range from 6 months to 3 years compared to 5 to 25 years for mortgages with banks.
Unlike traditional lenders, private lenders prioritize other loan factors over poor credit, where credit heavily influences approval. People turn to private lenders after conventional rejections due to low credit, self-employment, or non-residential property purchases.
How Long Does It Take to Get Approved for a Private Loan?
Due to limited restrictions, private mortgage loans negotiate quickly, and the application process is straightforward. We can approve a mortgage request in 24 hours, but completing the mortgage is 2 to 3 weeks on average.
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%.
Why Brampton Is a Great Place to Live
With neighbouring Mississauga to the west and within a short drive to Pearson International Airport, the municipality of Brampton is ideally located for homeowners who want a neighbourhood with a more suburban feel along with convenient transportation and access to communities throughout the Greater Toronto Area (GTA), including the heart of Toronto.
Mortgage Broker Store Can Direct You in Your Search for Private Mortgage Financing
As an active real estate team in Ontario, Mortgage Broker Store has assisted hundreds of Ontarians in securing essential loans. With an extensive network of private lenders in Ontario and Brampton, they help borrowers find suitable mortgage solutions.
After consulting by phone or email, they survey numerous private lenders, negotiating to find the optimal solution for you. This ensures borrowers secure the best qualifying loan, saving hundreds over their mortgage or home equity loan term.
- Introduction
- Different Types of Private Mortgage Lenders in Brampton
- Different Types of Private Loans in Brampton
- What Sets Private Loans Apart from Traditional Mortgage Loans?
- How Long Does It Take to Get Approved for a Private Loan?
- Costs Involved in A Private Lender Mortgage
- Why Brampton Is a Great Place to Live
- Mortgage Broker Store Can Direct You in Your Search for Private Mortgage Financing