Etobicoke is in Toronto, Ontario, Canada, where the housing market is booming. Toronto has a variety of brokers that offer private lender mortgages. We have many private lenders in our network ready to provide money in Etobicoke and the entirety of Toronto. Our private mortgage lenders in Etobicoke accept even those with bad credit and the self-employed who might not get bank loans. Call us today to discuss your situation and see the financial options available to meet your needs.
Etobicoke Private Lender Mortgages
A private lender mortgage in Etobicoke is a loan secured against property and one that a large financial institution doesn’t provide. Private lenders are individuals or companies deciding to invest their money in the real estate sector. Most private lenders in Etobicoke prefer investing in properties owing to the high increase in price and the ease of selling a property through power of sale if a client cannot pay their fees. The lenders claim investment in chronological order from the initial to the final lender of the private mortgage.
Private lenders are not covered by government insurance for mortgages, so many charge a fee in advance to cover the risk associated with private loans. Other fees are usually for paying mortgage brokers, real estate lawyers and home appraisers.
Reasons to Get a Private Lender Mortgage
Private lenders provide money for a variety of personal and business reasons. In this case, lenders will want to know why you need the money and whether you can service the mortgage. Some of the common reasons why people opt to get a private lender mortgage include:
- Disability or sickness that causes inability to work
- Self-employment or retirement which makes it impossible to get loans from banks
- To repair or repair a property
- Recent job layoff
- Need to have money urgently
- To pay off high-interest debts
Private lenders are a popular option for those who do not qualify for bank loans. They are typically more expensive than bank loans and are recommended as short-term solutions. Our company specializes in providing these short-term solutions and also helps clients qualify for lower interest rates from banks after they have finished the private mortgage.
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%.
Information on Private Mortgage Lenders in Etobicoke
The real estate market of Toronto as a whole is the fastest growing in Canada. There was more than 20% of the industry in house prices and sales between 2015 and 2016.
City regulations promote the building of condominiums, which is why most of the new homes in this area are condo units. Etobicoke has a high unmet demand for detached and semi-detached homes. The average home in Etobicoke goes for $737,233 and sells within just 22 days.
Looking for expert guidance in navigating the world of private mortgage lending in Ontario? Look no further than Mortgage Broker Store. Jonathan Alphonso and our team specialize in connecting clients with the perfect private lender tailored to their needs.