Private mortgage lenders in Kingston offer a streamlined process that’s a suitable alternative for people facing certain economic situations. Private mortgage lenders focus more on the equity in a home to approve a mortgage loan and less on other benchmarks, like a credit score, and the approval process is also quicker. They can be a good option for people looking to borrow money quickly, using the equity in their home.
Read on to learn more about how private mortgages blend well with Kingston’s real estate trends.
Private Mortgage Options for Kingston-Based Borrowers
Private mortgage refinancing options for homeowners wishing to use their home as collateral and existing equity can include:
- Home equity loans – A second mortgage utilizing existing home equity to be used for a multitude of short-term financial needs.
- Home Equity Line of Credit (HELOC) – Also utilizing existing equity and serving as a revolving line of credit, enabling funds to be available as the balance is paid off, a homeowner only needs to pay the monthly interest on the line of credit.
- Debt Consolidation Loans – Merging multiple debt payments into one manageable monthly payment, allowing all associated housing costs to be covered more comfortably.
- Home Renovation Loans – Access equity to pay for any updates or renovations to your property. The funds are negotiated on a short-term basis.
- Bridge Financing – Providing short-term funds to meet immediate financial objectives, bridge loans are typically 3 to 6 months in length and structured as temporary financial solutions.
- Second Mortgage – Pay for immediate expenses and pay off mortgage arrears if behind in the mortgage payments or help pay for monthly principal mortgage payments.
- Refinancing – Adjust the terms of the principal mortgage loan to allow for easier monthly payments.
Common Traits for All Private Mortgage Financing Options
- All private mortgage options are structured as short-term only. Typically, a private mortgage loan will be 1 to 3 years.
- Private mortgage loans are negotiated quickly, with processing times generally taking as little as 2 to 3 weeks.
- Private second mortgage loans tap into existing equity in your home.
- Private loans get negotiated despite poor credit.
Why Are the Rates and Fees Higher on Private Loans Than Advertised Bank Rates?
The answer is simple. Lenders with poor credit and non-traditional income streams view these mortgage loans as inherently higher-risk. Banks require exemplary credit and substantial household income and can therefore, offer lower corresponding rates.
What to Bring When Contacting a Private Mortgage Lenders in Kingston
- A list of additional assets that you may have besides your primary residence.
- Paperwork proving all sources of monthly income, including investment income, contract income, self-employed income sources, and child/spousal support monthly income.
- A recent appraisal of your property
- 2 Years of Notice of Assessments from the CRA, if applicable.
- Clarity on the type of private mortgage financing you will most likely need.
- Kingston: A Good Place to Get a Private Mortgage
- Kingston is a great city to live in, and many private lenders are comfortable investing in this city. It has several unique attributes. It is home to Queen’s University and Fort Henry. The downtown core has several exciting shops and parks like Grass Creek and the downtown waterfront trails. These attributes contribute to Kingston’s real estate market, as reflected in recent numbers.
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%.
Good Real Estate Numbers in Kingston
Current numbers from the Kingston and Area Real Estate Association MLS show that, on a year-to-date basis, home sales totalled 1,526 units over the first six months of 2024, up by 7.6% from the same period in 2023.
Kingston is a popular tourist destination, situated on the eastern end of Lake Ontario, the mouth of the St Lawrence River, and the most southerly end of the world-renowned Rideau Canal.
The price of a single detached property in Kingston in July 2024 was $580,000.
Despite the highly positive Kingston real estate numbers, some existing Ontario homeowners may have damaged credit. Many people have been turned away by banks for mortgage refinancing. If poor credit has been an obstacle in seeking mortgage financing, well-established private lenders in the province provide short-term mortgage financing.
Mortgage Broker Store Can Negotiate Different Types of Second Mortgage Loan Options
With access to a broad network of well-established and experienced private lenders across Ontario, Mortgage Broker Store can connect an interested homeowner to private lenders to discuss various refinancing options.
We can also negotiate private financing directly, depending on your specific financial objectives. Poor credit and non-traditional income need not be a barrier to obtaining a bridge loan or any other loan to help pay off pressing monthly liabilities. Don’t hesitate to contact us at your convenience to discuss the best options to suit your unique financial needs.
- Introduction
- Private Mortgage Options for Kingston-Based Borrowers
- Common Traits for All Private Mortgage Financing Options
- Why Are the Rates and Fees Higher on Private Loans Than Advertised Bank Rates?
- What to Bring When Contacting a Private Mortgage Lenders in Kingston
- Costs Involved in A Private Lender Mortgage
- Good Real Estate Numbers in Kingston
- Mortgage Broker Store Can Negotiate Different Types of Second Mortgage Loan Options