A private lender is an individual or company that operates independently of provincial and federally regulated bodies like trust companies, credit unions, and banks. They offer a variety of loans, including first—and second-mortgage loans and home equity loans.
Knowing about the place is a good start if you’re considering doing business with private mortgage lenders in Innisfil. 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.
Mortgages from Private Lenders
Most private mortgage lenders in Innisfil specialize in hard-to-place mortgages that traditional lending institutions won’t approve. Their flexibility allows them to offer credit to individuals with low credit scores and incomes.
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. Depending on individual circumstances, the amount can be $20,000 or more. 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 make lending decisions based on market value and debt. While banks rely on credit scores, private lenders emphasize other metrics, such as the Loan-to-Value Ratio (LTV).
That number compares the amount of money applied against the asset’s market price. Here’s an example.
A home is appraised for $1 million. 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 face 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 monthly 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 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 rejected by banks. This is particularly useful in emergencies 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. For example, some larger banks can take approximately 30 to 45 days to process an application. However, you can get a conditional decision with an estimated closing cost only around three days after applying.
However, the process of underwriting, home appraisal, and getting an inspection comes next, and that takes time.
In addition, you should get pre-approved for a traditional loan first. Having this estimate is good, but you’ll need to be careful to avoid making large purchases or applying for further credit.
Private lenders can provide streamlined approvals in as little as 24 hours or, at the longest, a week. These alternative lenders look beyond the traditional borrowing criteria. To speed things up, they consider a property’s value and outstanding debts rather than the credit score.
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 August 2024 is $951,358. That represents a monthly increase of 15% and a yearly increase of 1.8%; the quarterly change is positive and shows a 6.9% gain.
According to Areavibes, Innisfil’s total crime rate is 44% below the national average. Property crime is 45% below the average for the entire country, and violent crime is 42% lower.
These statistics are important to consider if you plan 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.