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.
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%.
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.
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.