The Government of Canada has banks under strict regulations, which unfortunately leave many residents seeking loans out in the cold. Mortgage borrowers who cannot meet the banks’ criteria for loan approval must seek alternative funding only from private mortgage lenders in Caledon. These companies or individuals are not under so much government control, allowing them to service hard-to-place mortgages that the banks rejected. Banks can only issue mortgages to individuals with 600 credit score points or more. People who cannot meet bank loan approval criteria can turn to private lenders for help.
Mortgages from Private Lenders in Caledon
Private mortgage lenders in Caledon, Ontario, will provide funds only in registered mortgages. A registered mortgage means the lender can sell the property used as security if the borrower cannot honour the deal. You can get as little as $20,000 for one year (unless you request otherwise). For riskier second mortgages or loans to people without an income, the lenders charge higher fees than those for bank loans. Private lenders generate income by investing in real estate, and the Caledon market is attractive as it has some of the country’s highest real estate appreciation rates.
Why Might One Need a Private Mortgage?
While applying for a mortgage with a private lender, you will be asked to state why you need the money. Thankfully, private lenders are more lenient than banks, accepting any reasonable response. Some popular ones include:
- To pay off high-interest credit card debt
- To pay tuition fees for college or university
- To stop a power of sale or foreclosure
- To cover living expenses after a work layoff
- To pay for home repairs or renovations
Private lenders target clients who cannot get a low-interest bank loan. Our network of lenders in Caledon can provide mortgages to individuals turned down by banks.
Fast Financing from Private Lenders
The main banks of Ontario must follow a rigorous, time-consuming mortgage approval process, which cannot be expedited. This can be an issue when faced with urgent property sales. The solution is private lenders who can provide funding within 24 hours. Our private lender network can offer loans against real estate in all cities and towns of Ontario.
What You Need to Get a Private Lender Mortgage
To lend a loan, private lenders focus on other market value and existing debts on a home. This is a huge difference compared to banks, which look to credit scores to inform their decisions. Rather than credit score, private dealers calculate a metric known as the Loan-to-Value (LTV) ratio to determine if a property is a worthy investment.
Here is an example: for a property with a $500,000 first, is requesting a $250,000 second, and has an appraisal value of $1,000,000.
(500,000+250,000)/1,000,000 = 75%
Most private lenders in Caledon do not lend to residential real estate with an LTV of more than 75%. It is already a big risk to loan to people with bad credit, so private lenders generally avoid properties with high LTV as it will not translate to profits for them even if they sell a property. The Ontario Mortgage Act mandates the first mortgage be paid first, requiring sufficient property equity for a reasonable mortgage amount.
Information on Lenders in the Caledon Real Estate Market
Caledon’s real estate prices have risen steadily since 2012, reflecting high property prices in Ontario Province. Ontario’s double-digit real estate growth drives people to private real estate lending for extra income. Ontario is a great real estate market and considered one of the best places to live. It is also Canada’s economic powerhouse, meaning that real estate prices will continue to increase.