Private mortgage lenders are a sensible alternative for people not qualifying for a traditional bank loan. Banks and credit unions have strict lending criteria and a long and involved process. Their requirements include a good credit score and stable, verifiable income.
People with poor credit scores have better luck with private mortgage lenders in Oshawa, who are less regulated. Private lenders have requirements that focus on the equity you’ve built up. They place less emphasis on credit ratings.
Private lenders are also less regulated. That means their approval process is more streamlined than the traditional model. Governmental regulatory bodies do not oversee these lenders, but their mortgages must adhere to the laws described in the Ontario Mortgages Act.
Private funds can provide flexible, short-term solutions for borrowers looking to improve cash flow. Whether for residential properties or unique investments, a private lending company can offer options that traditional financing often doesn’t, helping borrowers access funds based on property value rather than lengthy application processes to meet mortgage terms.
Who Are Private Lenders?
Ontario has three different categories of lenders. Private lenders in Oshawa fit into the 3rd one. Discover these lending options:
- A lenders include major banks with strict criteria for mortgage financing. They look for low-debt ratios, straightforward yearly income and substantial and excellent credit scores. And a long application process.
- B lenders include trust companies and credit unions. Although they are slightly more relaxed than banks, a credit score of at least 560 is usually necessary.
- C lenders are where private lenders in Oshawa fit in. Private lenders are individuals or companies that make money by lending on mortgages with a flexible approach. These alternative lenders can overlook high debt ratios, damaged credit and other loan approval criteria.
These private mortgage lenders offer a type of mortgage loan that is access to funds quickly. For a variety of reasons, they can also benefit from flexible terms that make it easier to manage an affordable monthly payment based on their financial situation.
These mortgage loans are usually for a short-term period of one to three years. Read on to learn about their specific approval requirements and if they can help your financial situation.
Private lenders are independent financial entities or individuals who offer alternative mortgage products to borrowers who may not qualify through traditional banks. Working with a mortgage broker, borrowers can access tailored lending solutions from private lenders, often with competitive current interest rates. Private lenders frequently assist with debt consolidation, allowing homeowners to combine various high-interest debts into a single, manageable payment. This debt consolidation option helps improve cash flow and provides a more streamlined way to manage finances.
Types of Traditional Mortgage Options Available
Private mortgage options offer a range of tailored solutions for borrowers who may have difficulty securing financing through traditional lenders. These options include 2nd mortgages, short-term mortgage financing, and private mortgage solutions for those with non-traditional income or a bad credit score. Private lenders specialize in equity lending and can provide funds quickly for residential or commercial properties, often offering more competitive mortgage rates. Whether for real estate investments or immediate financial needs, private money through a mortgage brokerage can provide quicker approvals than banks. For borrowers looking for a commercial mortgage, private lenders deliver flexible financing that aligns with unique financial situations, helping those with specific needs in the ever-evolving real estate market.
Private mortgage loans often provide faster approval times than traditional bank mortgages, with decisions frequently made within just a few business days. Common reasons borrowers turn to a 2nd mortgage lender or mortgage private options include accessing additional equity or securing an additional loan type that doesn’t fit within traditional loan terms, making private mortgage loans an appealing alternative to conventional financing.
Reasons for Needing a Private Lender Mortgage in Oshawa
Private lenders appeal to people who can’t get a traditional mortgage. These alternative lenders attract people for a variety of other reasons, including borrowers who are looking to:
- Pay living expenses after a layoff
- Stop a power of sale or foreclosure
- Pay high-interest credit cards
- Pay tuition fees for college or university
- Pay for home repairs or renovations
Mortgage Broker Store has a private lender network ready to work with individuals turned down by banks.
Private mortgage lending partners offer a solution for those with bad credit, providing a quick approval process that many traditional financial institutions can’t match. With flexible terms and manageable monthly payments, private lenders make it possible for borrowers to secure financing even if they don’t meet the strict requirements of a bank. Borrowers can secure manageable monthly mortgage payments, allowing them to keep up with their mortgage payments even with less-than-perfect credit.
Swift Financing from Private Mortgage Lenders in Oshawa
Banks must follow a long process before approving mortgages. Their criteria focus is more on credit scores. Equifax notes these numbers range from 300 to 579 under the poor category. Traditional lenders will want to ensure that your income is stable and meets certain total debt service thresholds (TDS). Banks and credit unions also use the gross debt service (GDS) as a metric to approve a mortgage, slowing the approval process down even more.
On average, approval from a traditional lender can take a few days to several weeks.
Private lenders in Oshawa have a more streamlined and quick approval process. Remember, much of the faster approval process emphasizes equity rather than your credit score. That’s good news when you add it to the real estate numbers for Oshawa.
Private Lenders in Oshawa and Equity
Private lenders usually seek to approve property owners with more than 25% of their equity available. A home appraisal is vital; many private lenders will ask for one. An appraiser will look at several factors, such as the state of repair the property is in. Here are a few other things they might want to look at:
- A property survey helps mark out the boundaries.
- Include receipts and descriptions for home improvements you’ve made within the last 15 years.
- Remember to add in any previous appraisals.
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 the Oshawa Real Estate Market
The current Oshawa MLS stats report an average house price of $775,561 in the last 28 days and 180 new listings as of January 2025. Those numbers represent an increase of 1.1% monthly and a quarterly jump of 1%.
As Oshawa continues to grow as a major city, prospective buyers may consider various types of loans available through both traditional lenders and private mortgage lenders. While traditional lenders often require a minimum credit score, private mortgage lenders offer flexible repayment plans and competitive rates, providing more financial resources for borrowers over a shorter period of time. For those who need more detailed information, private lenders in Oshawa are available to discuss options tailored to individual needs, including flexible terms and competitive private mortgage rates.
Looking for Mortgage Solutions in Oshawa?
An experienced mortgage broker can help borrowers explore private lending solutions that best suit their needs, whether they’re looking to refinance a current mortgage or secure new mortgage funds. With access to diverse mortgage options, brokers can connect clients to private lenders who offer flexible terms and faster approvals than traditional institutions.
Mortgage Broker Store focuses on numerous mortgage-related products with flexible terms. No matter the property type, one of our priorities is private mortgage financing, which doesn’t meet the requirements of traditional lending institutions. Our team includes private lenders, brokers, and licensed mortgage agents who can help you with an excellent rate. Let us help you prepare for and get a short-term loan that meets your requirements.
- Introduction
- Who Are Private Lenders?
- Types of Traditional Mortgage Options Available
- Reasons for Needing a Private Lender Mortgage in Oshawa
- Swift Financing from Private Mortgage Lenders in Oshawa
- Private Lenders in Oshawa and Equity
- Costs Involved in A Private Lender Mortgage
- Information on the Oshawa Real Estate Market
- Looking for Mortgage Solutions in Oshawa?