A private lender is an individual or company that works apart from provincial and federally regulated bodies like Trust Companies, Credit Unions and banks. They offer a variety of different loans that include first and second mortgages and home equity loans.
If you’re thinking about doing some business with private mortgage lenders in Innisfil, knowing something about the place is a good start. Barrie, Orillia, Alliston and Bradford are all close by.
The city of Innisfil is a quiet location with a great history. Innisfil is located south of Barrie and north of Toronto. Innisfil is also over 170 years old. One of the big advantages is how safe the area is.
According to areavibes, Innisfil has a total crime rate that’s a full 44% below the national average. Property crime is 45% below the average for the entire country. Violent crime is a full 42% lower.
These statistics are important to consider if you’re planning to get a mortgage in Innisfil. You should also consider private mortgage lenders as an alternative to a conventional loan. Read on to find out more about this method.
Mortgages from Private Lenders
Most private mortgage lenders in Innisfil deal in hard to place mortgages, which traditional lending institutions won’t approve. Their flexibility allows them to offer credit to individuals with poor credit scores and low income earners.
Innisfil private lenders loan out money as registered mortgages secured by real estate. That way, they have Power of Sale on properties in default.
Loans are typically for one year unless the client requests otherwise. The amount can be $20,000 or more, depending on individual circumstances. Riskier products like second mortgages carry higher fees than those charged by banks and credit unions.
Understanding the requirements for one of these loans can help anyone make an informed decision.
Approval Criteria for a Private Loan
Private lenders focus on market value and debt when making lending decisions. While banks rely on credit scores, private lenders place more emphasis on other metrics like The Loan to Value Ratio (LTV).
That number compares the amount of money that’s being applied for against the market price of the asset. Here’s an example.
A home gets appraised for $1 million dollars. The current homeowner wants a private mortgage of $600,000. The LTV is 60 percent. Most private mortgage lenders in Innisfil will loan up to 75% LTV.
Private lenders offer more flexible options for approval. These are attractive to certain people who will get the most from this type of mortgage.
Reasons Why People Need Private Mortgages
People who apply for private mortgages are facing everything from unexpected lifestyle changes to unforeseen home issues. Some of those reasons include the following:
- To pay off high-interest credit card debt. News reports (CTV March 09, 2023) say that credit card debt reached $100 billion for the first time. The report blamed high inflation and rising interest rates.
- To pay for living expenses after a work layoff. Here are some comparison numbers for these expenses by province for 2023. According to the statistics, you’ll need around $7,071 Cdn every month to live in Toronto. Even with a good job.
- To stop a power of sale or foreclosure. The first is more common than the second. But either one can wind up getting a homeowner evicted. Here’s some detailed information on how private mortgages can stop a power of sale.
- To pay for home repairs or renovations. A foundation repair can cost $4,951 on average, with the high end peaking at $7,766.
- To pay tuition fees for college or university. For example, the average undergraduate cost for a Canadian student rose from $4,400 Cdn in 2006 to $6,834 Cdn in 2023.
Individuals who cannot get a bank loan are the ideal clients for private lenders. We have a large network of lenders who can provide competitive mortgages to people who were rejected by banks. This is particularly useful in emergency situations that urgently need financing.
Fast Financing from Private Lenders
Applying for a mortgage from a more traditional institution is a tedious process that takes a longer period of time. For example, some of the larger banks can take approximately 30 to 45 days to process an application. However, you can get in a conditional decision that comes with an estimated closing cost in only around 3 days after applying.
However, the process of underwriting, home appraisal and getting an inspection comes next. And that takes time.
Added to that is the fact that you should get pre-approved first for a traditional loan. It’s a good idea to have this estimate, but you’ll need to be careful to avoid making any large purchases or applying for further credit.
Private lenders can supply streamlined approvals in as little as 24 hours or usually a week at the longest. These alternative lenders look beyond the traditional borrowing criteria. They take into account a property’s value and the outstanding debts rather than the credit score to speed things up.
Information on the Innisfil Real Estate Market
Having some information on the real estate trends in Innisfil supplies a complete picture. According to the current MLS stats, the average sold price as of April 2023 is $852,000. That represents a monthly dip of 5.7% and a yearly drop of 21.5% however, the quarterly change is positive and shows a 7.5% gain.
Mortgage Broker Store is a private mortgage lender in Innisfil serving other locations in the GTA. Call 416-499-2122 or email ron@mortgagebrokerstore.com for some free advice. Our team has over three decades of experience and a solid understanding that can help you through both Power of Sales and Foreclosures.