Private mortgage lenders that service Oakville can be companies or individuals who invest in properties to make money. Lenders invest in Oakville due to its high demand for residential properties and its proximity to Toronto. Private lenders typically lend out no less than $30,000 for one-year periods. The private lender will register the loan as a mortgage against the property.
Reasons for Asking for a Private Mortgage
You will explain why you need the mortgage during the mortgage application process. Private lenders will accept a wide variety of reasonable answers to this question. Some examples of reasonable answers include:
- To consolidate many debts into a single low cost mortgage
- To repair damages to a property or to perform renovations
- To provide income following the loss of a job
- To stop a power of sale or foreclosure action
- To pay the fees related to attending college or university
Private lenders primarily cater to individuals recently denied by their bank. Private lenders in Oakville mostly deal with clients who cannot get bank mortgages. Our team can also create a plan to fix the client’s credit score in the future.
Fast Private Mortgage Money
The complicated mortgage procedures that Canadian banks follow generally take a long time. Banks will refuse to speed up this process if requested. For time-sensitive real estate deals, there is a big risk of the deal falling apart due to delays. Private lenders are more reliable than banks when it comes to providing fast financing. Our network of private lenders can provide funds in as little as one day if needed. Our private lender network can service most of Ontario, including Oakville.
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 Lenders in the Oakville Real Estate Market
Oakville is a small town in southern Ontario that is unquestionably part of the Greater Toronto Area. Real estate investors invest in Oakville primarily because of its high demand for housing and because it is part of the Greater Toronto Area. Oakville has some of the most affordable housing in the Greater Toronto Area and is a common option for homeowners moving away from Toronto to find a larger home.
Looking for expert guidance in navigating the world of private mortgage lending in Ontario? Look no further than Mortgage Broker Store. We cover all your needs, from first and second mortgages to specialized loans.