Private mortgage lenders in Halton Hills, Ontario, offer an alternative to applicants who don’t meet conventional mortgage standards. Mortgage Broker Store is an industry leader in private mortgages. Traditional lending institutions like banks and credit unions are strictly regulated, and they pass along those stringent requirements to mortgage applicants.
Traditional lenders also emphasized credit scores. Here’s a link to an article from Equifax detailing how these scores play a big role. If you want a mortgage from a conventional institution, a score between 300 and 579 is considered poor. Other requirements include information on your hourly pay rate and current salary, personal identification, and a list of your assets. Private lenders offer a more streamlined process.
Mortgages from Private Lenders in Halton Hills
Private lenders in Halton Hills provide registered mortgages secured against real estate. They also work with clients in nearby towns like Milton, Burlington, Oakville, and Stewarttown.
The Ontario Mortgage Act (July 1, 2008) allows these lenders to sell the property if the owner defaults on the agreed fees. Some of the due diligence matters are covered here.
The loan amount may be as low as $20,000 for one year unless the client requests otherwise. Here are some FAQs from the Financial Services Regulatory Authority (FSRA) of Ontario. They provide a good overview and checklist if you’re considering starting the private loan process.
More about the approval process for these private mortgages is below.
Approval Criteria for Private Lender Mortgages
Private lenders in Halton Hills evaluate mortgage applications using different metrics. Credit unions, banks, and other traditional institutions place a heavy emphasis on income and credit scores.
These alternative lenders focus on the property’s location, appraised value, and the Loan-to-Value (LTV) ratio. This is a set of two numbers that compare the property’s value with the loan’s value.
Here’s an example of how that works:
If you want to buy a property worth $400,000 and the loan you need is worth $300,000, the LTV will be 75%. Here’s a link to a handy LTV calculator.
Because these loans are high-risk, applicants can expect to pay rates between 8% and 12% and fees of 4% to 6% of the total mortgage amount. Because these are alternative products, they cater to a set of people with specific needs.
Reasons for Needing a Private Mortgage
People need one of these private mortgages for a variety of different reasons. Some, through no fault of their own, have a low credit score that won’t allow them a chance at a more traditional loan. Remember, Equifax benchmarks a score of below 660 as poor.
Here are some other reasons people apply for one of these private mortgages.
- Covering unexpectedly overwhelming home repairs. A foundation fix, for example, can cost anywhere from $10,000 to $40,000.
- Facing the prospect of losing their home through either a power of sale or foreclosure. A lender can sell the property through a power of sale. With foreclosure, they take the title as well. A private mortgage can prevent the inevitable eviction of the homeowner.
- Helping homeowners with financially challenging situations like paying off high-interest credit card debt.
Government regulations require that banks, credit unions and other financial institutions follow strict guidelines. A network of private lenders serves Halton Hills as well as a variety of other cities and towns in Ontario. Those locations include Scarborough, Markham, Etobicoke and Ajax.
Understanding the best option for you means having all the information. That includes some data on the real estate trends in Halton Hills.
Trends in the Halton Hills Real Estate Market and Livability Stats
Halton Hills MLS® stats report 120 new listings in the area as per the market report for July 2024. The average house price is $1,229,670, and the median days on the market for a property is 26. Banks also look at several other factors, including your total debt load. According to the Government of Canada, this number should not exceed 44% of your gross income. These debts include spousal or child support, lines of credit, student loans, credit card balances, and car loans.
These numbers represented a monthly increase of 8.7% and a yearly increase of 5.9%.
This area includes several different communities, including Georgetown, Acton, Hornby, and Norval. According to AreaVibes, Halton Hills has a 67 out of 100 livability score.
Other Attractive Features
Some other attractive features include the fact that the crime rates in Halton Hills are 11% lower than the provincial average and that the cost of living in the area is 7% lower than the average for Ontario.
The median age of people in the area is 40.7 years. A full 75% of the people who live in Halton Hills are married, and 54% of those are families who have children at home.