Hamilton is a vibrant city and a great place to live. But, securing funds for a second mortgage or private mortgage loan can be challenging. Many Canadians face rejection from traditional lenders like banks and credit unions due to strict lending requirements, such as stringent credit history reviews. This reality leaves those with poor credit or unconventional financial situations looking for alternative options.
Non-traditional lenders, such as private mortgage lenders, offer tailored mortgage products with flexible lending terms and the potential for the lowest interest rates depending on the circumstances. For individuals in Hamilton, private mortgage loans can provide solutions to access funds quickly for real estate properties or other financial needs. With online applications and support from a dedicated team of mortgage professionals, these options simplify the process and often include shorter mortgage terms that adapt to unique situations. By stepping outside the conventional mortgage industry, borrowers can find innovative solutions to their financing challenges.
Private Mortgage Loan Services in Hamilton
There are a few reasons why someone would need the services of a traditional lender:
- Losing a job
- Being self-employed
- Getting separation or divorce
- Having an unstable or hard-to-verify income
- Debt consolidation (credit card debt) and reducing interest payments
- Having an illness that leaves you unable to work
- Renovating your home or second home to increase its value
Many reasons normally disqualify a person from being approved for a traditional bank loan, but not with a private lender.
Borrowers can access a wide range of types of loans offered by private lenders in Hamilton, including:
- Home equity loans
- Home Equity Lines of Credit (HELOC)
- Bad credit mortgages
- Second mortgages
- Home renovation loans
- Bridge financing
- Debt consolidation loans
- Reverse mortgages (open to those 55 years of age and over)
- Renegotiated terms on a first mortgage
When getting a loan from a private lender, the loan is secured against property, usually a house, condo, or cottage, but it could also be a plot of land. Many borrowers who face challenges such as high credit card debt may turn to private lenders as an alternative to traditional financing. However, if the borrower defaults on their private mortgage loan, the lender will initiate a power of sale. When a power of sale is initiated, the lender will get legal permission from a judge to sell the property to get their money back, just like a major bank would. To avoid this situation, borrowers should ensure they can meet the monthly payment requirements set by the private lender, which can sometimes vary based on the loan terms. Maintaining a manageable level of credit card debt is also crucial to help borrowers keep up with these payments.
Benefits of Private Mortgage Lending
Banks and other traditional lenders are known to have a lengthy approval process, which can take weeks. Even when borrowers provide banks with everything they request, processing the paperwork will still take a long time, which may jeopardize plans to buy a house. Bank mortgages are very difficult to receive.
They Offer Bad Credit Mortgages
Mortgage borrowers have a credit score under 620, so they may need to get a bad credit mortgage in Hamilton.
Having a bad credit score is not that unusual. Even credit card debt can lead to a low credit score. Private lenders are not subject to the same rules as banks and can provide private mortgage lending for many kinds of borrowers, including those with bad credit.
Private lenders base their loans on the amount of equity in your home, not your credit score—this is often referred to as equity lending, where the focus is on the property’s value rather than the borrower’s financial history.
Hamilton private mortgage lenders can quickly process loan applications, sometimes within a week. This speed is unmatched in the lending industry, making them a flexible option for emergency real estate financing. Unlike banks, private lenders are often willing to work with individuals dealing with credit challenges or a consumer proposal, offering them the opportunity to secure financing that traditional lenders might deny.
A real estate deal may fall apart if funding isn’t provided immediately; if a home buyer is in this circumstance, they can quickly get emergency financing from a private lender in Hamilton. This will allow the buyer to purchase the home while they wait for their primary lender to finish processing their short-term mortgage financing. During this period, the buyer will need to keep up with mortgage payments to the private lender, which can help them maintain good standing until their primary financing is finalized.
Private Hard Money Lending
Private hard money lenders operate just like most other private lenders. Hard money refers to hard assets such as houses, commercial buildings, plazas, rental properties, etc. Private money lenders usually personally inspect the properties they use as loan collateral. They will also need to see financial statements if the money is required for commercial or rental properties.
Getting a mortgage loan for your home or another real estate project can be difficult. Mortgage Broker Store can help you with all the required money loan documents, whether for a new home purchase or refinancing a commercial building. The interest rates for commercial properties are usually higher than those for houses, condos and other residential properties.
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%. If you’re a borrower with bad credit, you’ll find more information below.
Hamilton Living
The prices of homes in Hamilton have been rising dramatically from the early 2010s to the 2020s. In June 2012, the average price of residential property in Hamilton and Burlington was $658,237. As of January 2025, the average price of a home in the region rose to $767,318.
In recent years, Hamilton has moved away from steel production and spent millions revitalizing lands destroyed by factory pollution. Improved infrastructure from projects like the Red Hill Valley Parkway and Metrolink’s planned LRT expansion has helped boost property values in the city. Turning it into a popular destination for urbanites across the Greater Toronto Area and Canada.
How to Find Private Mortgage Lenders in Hamilton
Many are leaving Toronto for Hamilton, seeking spacious, affordable homes away from high prices and crowded living.
The city is beautiful to investors, and the real estate market is rife with home competition. There is a lot of demand for Hamilton’s real estate, and banks can’t fulfill it independently.
Bank-rejected borrowers can use Mortgage Broker Store to find and compare private mortgage lenders in Hamilton with exceptional service. With decades of experience, their team helps you find the best private mortgage lenders in Hamilton. Broker Store to find and compare private mortgage lenders in Hamilton.