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 when it comes to private mortgages.
Traditional lending institutions like banks and credit unions are strictly regulated and they pass along those stringent requirements to mortgage applicants. For example, conventional mortgages usually have a minimum down payment of at least 20 percent.
Banks also look at a number of other factors, including your total debt load. According to the Government of Canada, this number should not exceed more than 44% of your gross income. These debts can include things like spousal or child support, lines of credit, student loans, credit card balances, and car loans.
Traditional lenders also put an emphasis on credit scores. Here’s a link to an article from Equifax detailing how these scores play a big role. If you’re looking to get a mortgage from a conventional institution, a score between 300 to 579 is considered poor.
Other requirements include information on your hourly pay rate and current salary. Personal identification and a list of your assets are also required.
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 to 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 thinking about starting the private loan process.
More about the approval process for these private mortgages below.
Approval Criteria for Private Lender Mortgages
Private lenders in Halton Hills use a different set of metrics to evaluate mortgage applications. Credit unions, banks and other traditional institutions place a heavy emphasis on income and credit score.
These alternative lenders focus on the location of the property, its appraised value, and the Loan-to-Value (LTV) ratio. This is a set of two numbers that compare the value of the property with the value of the loan.
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 somewhere between 7 to 12% and fees that are 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.
- The money can cover an unexpectedly overwhelming home repair. A foundation fix tops at least one list costing anywhere from $10,000 to $40,000.
- Other people might be looking for a private mortgage because they are 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 the foreclosure, they take the title as well. A private mortgage can head off what would otherwise be the inevitable eviction of the homeowner.
- A private mortgage can also help a homeowner 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 serve 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 121 new listings in the area as per the market report for April 2023. The average house price during this time was $1,086,147, and the median days on the market for a property was 17.
These numbers represented a monthly drop of 1.6% and a yearly decline of 28.5%. However, on a positive note, the quarterly change was a bump in the right direction of 11.8% for real estate in Halton Hills.
This area is made up of several different communities, including Georgetown, Acton, Hornby and Norval. According to AreaVibes, Halton Hills has a livability score of 86 out of 100. That’s considered outstanding.
Other Attractive Features
Some other attractive features include the fact that the crime rates in Halton Hills are 28% lower than the average for the province. The cost of living in the area is also 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.
Mortgage Broker Store is a private mortgage lender in Halton Hills. We also serve other locations in the GTA. Call 416-499-2122 or email ron@mortgagebrokerstore.com for some free advice. Out team has 34 years of experience and extensive knowledge in all aspects of Power of Sales and Foreclosures.