Private lenders in Markham typically deal with individuals looking to pay off debts or buy with damaged credit. The demand for private mortgages is quite high in both of these groups. Markham shares a border with Toronto, which makes it an attractive investment for private lenders. Markham’s private lenders can provide mortgages for a single-year term or longer. Lenders arrange the loan as a mortgage, securing the debt to the property.
Many people fail to meet a bank’s strict mortgage requirements and get turned down. A private lender in Markham is a popular alternative since their requirements are more lenient. Markham’s thriving real estate market has attracted many private mortgage lenders.
Common Reasons to Get a Private Mortgage
A private lender wants to know why you will need the money. There are many unique reasons, but some of the more common ones include:
- To pay off high interest debts such as credit cards
- For renovations or repairs to your home
- Loss of job or other income source
- To stop a power of sale or foreclosure proceedings
- To pay education fees
Some people come to private lenders after they’ve been turned away by the banks. Markham private lenders specialize in financing for people with bad credit or low incomes.
They develop plans that help clients improve their credit scores in the future.
Fast Private Financing
Most large lending institutions have lengthy approval processes. This can cause issues with time-sensitive deals. Our large network of Ontario private lenders can provide loans in Markham and the rest of the GTA. Our brokerage has close relationships with all of Markham’s lending firms and their lawyers. We can provide fast financing for deals with tight time constraints.
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%.
Information on Markham Real Estate
Markham MLS® stats for April 2024 indicate there were 643 new listings in the town in 17 days. The average sold price for the same period was $1.4 million. That represents a positive monthly change of 3.7%. The quarterly change was an increase of 10%. The YoY difference was a slight decrease of 6.1%.