Canadian banks have many strict requirements for mortgages, and many people are unable to get bank mortgages. One of the key ways to get financing after being turned away by banks is to use a Brampton private lender. Brampton’s private lenders have much looser mortgage approval requirements than the banks do. A major change in mortgage rules on October 17th, 2016 means that people will have to qualify for higher rates when going to a bank. Many people in Brampton can no longer qualify for bank mortgages due to these new rules. The private lenders in Brampton are not subject to these rules as they are not financial institutions, can service clients who are turned down by banks.
Private lenders are independent persons or companies who seek to invest in properties in Brampton. Brampton is known as an up and coming area and its houses are a popular choice for people moving from Toronto and new immigrants. Many private lenders prefer to in Brampton and the surrounding area specifically. For a typical house in Brampton, lenders can loan $20,000 or more and usually for one year terms. The loan is secured to the property as is standard with all mortgages. If the borrower fails to pay their mortgage fees, then the property can be sold and the lender can recoup their money.
The requirements that Brampton private lenders have for mortgage approvals are different than those of banks. Private lenders are less concerned with credit scores, and more concerned with the property’s sale value. Most lenders base their approval decisions on the property’s Loan to Value (LTV) Ratio. To calculate a property’s LTV, you divide existing debts secured against the property by the selling price of the property . For example a property with a selling price of $100,000 and a first mortgage of $75,000 will have an LTV of 75%. Most private mortgage lenders will lend up to 75% or 90% LTV depending on circumstances.
Common Reasons for Needing a Private Mortgage
Many private lenders in Brampton will provide financing if their conditions are met, and the reason for needing the money is reasonable. Some popular reasons private lenders will lend for include:
- Paying off high interest loans
- To do renovations on a property
- Loss of income or termination of work
- Illness or disability that prevents a person from working
- To pay college or university tuition fees
Banks will reject mortgage applications for a wide variety of reasons, but private lenders can still work with these people. We specialize in getting private lender mortgages for people with bad credit or no income. We also work with clients and make a plan to improve their credit score and become eligible for lower rates in the future.
Emergency Mortgage Financing
Large banks and credit unions take a long time to process paper work and get you financing. Even when you cooperate fully with these financial institutions, it is usually impossible to speed up the process. For time sensitive real estate deals, the entire deal can be turned down if the money is not provided quickly. We specialize in providing financing for these types of time sensitive real estate dealings. If you need home financing quickly, we can use one of our Brampton private lenders.
Many of the lenders in our network lend in Brampton and the towns that surround it. We are well acquainted with all the real estate firms in Brampton as well as the law firms that are involved.
Info on Private Lenders in Brampton and the Real Estate Market
Brampton is a quickly developing city in the Greater Toronto area. Home prices are rising more than 10% year over year, while still being more affordable than Toronto. Investors see Brampton as a safe place to place their money while still seeing good returns on their investments. Young home buyers and new immigrants commonly choose Brampton as a place to live due to its developed infrastructure and affordable housing.