Banks in Canada have no choice but to follow rules laid down by the government but these turn many people away. They turn to private lenders who specialize in servicing hard to place mortgages that wouldn’t be accepted by banks. Private lenders are not required to follow the same rules as banks making it possible for them to help people who fell below the credit requirements by banks. Banks need the highest credit score to deem anyone worthy of a loan. Private mortgage lenders in North Bay are interested in the property and will not hesitate lending to poor credit individuals with property to act as loan security.
Mortgages from Private Lenders
North Bay private lenders prefer loaning out money as a registered mortgage secured against real estate. Under the Ontario Mortgage Act, the private lender can sell off a property in default if the mortgage fees are not paid as agreed. Private lenders in North Bay will loan as little as $20,000 for one year unless you request otherwise. Riskier loans like second mortgages or loans for people with no income attract higher rates from private lenders. Private lenders generate profits by investing in real estate. The North Bay real estate market is particularly attractive owing to its location in Ontario, a province associated with some of the highest appreciation rates in Canada.
Approval Criteria for Private Lender Mortgages
When deciding whether or not to approve an application, private lenders are more concerned about market value and existing debts on a property. Banks on the other hand, mainly consider credit score when evaluating mortgage applications. Private lenders divide the debts on a property by its appraised price to get its loan to value ratio. They will only loan to properties with LTV of 75% or less as they hope to recoup if you are unable to repay. Rules state that in the event a property is sold off the initial mortgage holder makes their claim, followed by the second until each lender has been compensated. The less equity there is left, the lower the chances are for the lender to claim after activation of a power of sale.
Reasons for Needing a Private Mortgage
While applying, you will be required to state why you need the private lender mortgage. This information is solely for record keeping and private lenders are very lenient as long as it is a reasonable explanation. Some popular uses for the money include:
- For living expenses after being laid off
- To pay tuition fees for college or university
- To stop a power of sale or foreclosure
- To pay off high-interest credit card debt
- To pay for home repairs or renovation
Private lenders target people who cannot access bank loans for one reason or another. Our network of private mortgage lenders in North Bay exclusively offer mortgages to individuals who were rejected by banks.
Rapid Funding from Private Lenders
Major banks operating in Ontario must follow a comprehensive loan approval process. There is no way of speeding this up and it can be a major issue for property sales in urgent need of money. Private lenders can come to the rescue because they are not governed by the same stringent rules. If you so require, a private mortgage lender in North Bay will give a loan in only 24 hours. This is particularly helpful in emergencies like a power of sale. Our network of private lenders can loan on real estate in every city or town of Ontario.
Information on Lenders in the North Bay Real Estate Market
North Bay City or the gateway to the North as locals fondly call it is an economically diverse location. It is one of the most artistically talented cities in Ontario and boasts a vibrant real estate scene. Many people looking for other sources of income are turning to private real estate lending. Ontario has dominated the news for a while now, owing to significantly high real estate prices and that isn’t about to change. People will continue to witness an increased presence of private mortgage lenders in North Bay trying to grab a share of the lucrative business.