Canadian banks are strictly controlled by the government and strict regulations are a deterrent to many loan seekers. You can only get a bank loan with 600 credit score and that is too high for many people in the country. The solution is private lenders who are not so strictly regulated and specialize in servicing hard to place mortgages rejected by banks. If you have been turned down by banks, look to the private mortgage lenders in Georgina for help.
Mortgages from Private Lenders
Georgina private lenders prefer to give out loans as registered mortgages secured by the property. According to the Ontario Mortgage Act, a private lender can sell off the property in default if rates are not paid as in the loan agreement. A private lender will typically offer anything from $20,000 going up to be repaid in one year unless you request an extension. Second mortgages, loans to people with low income and other high-risk circumstances, attract higher interest rates and fees than bank loans. Private lenders in Georgina are individuals or companies that generate profits from real estate. They are particularly attracted to Ontario’s Cities and Towns owing to record high returns in recent times.
Approval Criteria for Private Lender Mortgages
Private lenders concentrate on market value and existing debts on a property when deciding on which mortgages to approve. Banks, on the other hand, rely on credit scores to inform their lending decisions. Private lenders must calculate a metric known as Loan-to-Value ratio (LTV), which tells them whether a property is a worthy investment. LTV on a property is calculated by dividing total debts by the price of a property. The ideal result should be below 75% LTV, as most private lenders in the reign will not take on more than that. A registered mortgage may grant power of sale to private lenders, but sometimes, that is not enough to earn them compensation from a power of sale. This is because the same Ontario Mortgage Act stipulates that the lenders involved in a property should recoup sequentially after a power of sale has been activated.
Reasons for Needing a Private Mortgage
While applying for a private lender mortgage, you will be asked to explain why you need the money. Don’t worry about rejection at this point because private lenders only seek this information to keep records. This differs greatly from banks, which often reject mortgage applications because they need the money. Private lenders understand that clients have diverse needs and accept the most reasonable answers. Some common uses for the money include:
- To pay for renovations or home repairs
- For living expenses after a layoff
- To stop a power of sale or foreclosure
- To pay off high-interest credit card debt
- To pay tuition fees for college or university
Private lenders specifically target people who could not be approved for traditional bank loans. Our private mortgage lenders in Georgina can lend to anyone who does not meet the banks’ approval criteria.
Rapid Financing from Private Mortgage Lenders
All the major banks in Ontario are required to approve mortgages after going through numerous steps to vet the client. This is impossible to speed up and very problematic for property sales that require rapid financing. People in such a predicament can turn to private lenders who can process your application much faster than banks. If so required, the mortgage can be processed in as little as one day. Our vast network of lenders can loan to real estate in other parts of the province.
Information on Lenders in the Georgina Real Estate Market
All cities and towns in Ontario are the subjects of much debate because of the record high real estate prices in recent years. Many people looking to supplement their income in Georgina are turning into private real estate lenders. Ontario shares its border with the US and is a major economic hub. Many people also view Ontario as the best place to live in Canada. All these are the reasons why there continues to be an increase in the presence of private mortgage lenders in Georgina.
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. Whether you’re seeking a first mortgage, second mortgage, or specialized loan, we’ve got you covered.