Private mortgage lenders in Richmond Hill can approve people who don’t qualify through traditional banks. Read on to learn more about Richmond Hill and how even someone with bad credit can qualify for a loan. Richmond Hill is located in York Region and is well known as an excellent place to grow or start a business.
People in Richmond Hill have choices when they are looking for a mortgage. Private mortgage lenders in Richmond Hill are a solid option for a specific group.
Mortgages in Richmond Hill Versus Conventional Loans
Private lender mortgages in Richmond Hill are an alternative for people who turned down conventional loans. Canadian banks are heavily regulated, while these private lenders don’t operate under the same government restrictions.
What’s more, their focus and the criteria they use to approve applications are different. Banks and more traditional institutions like credit unions place an emphasis on reliable income and credit scores. There’s usually a stress test involved, whereby applicants need to qualify at the five-year posted rate or two percentage points higher than the one offered by their broker or bank. The benchmark is the higher of the two.
Read on to find out how mortgages from Richmond Hill’s private lenders differ.
Private Lenders in Richmond Hill Loans
Private lenders in Richmond Hill are attracted to the area’s real estate due to the high price, appreciation and values. The minimum these lenders usually loan out is $30,000 or more on single-year terms as of 2024. That way, the property can be sold if the borrower fails to pay.
Reasons for a Private Mortgage
You’ll need to list the reasons for a private mortgage when you fill out the application. Some of the common answers include:
- Paying off credit card debts.
- Renovating a property or making repairs.
- Having a supplemental income after losing a job.
- Preventing a power of sale or foreclosure.
- Paying for college or university tuition.
Private lenders usually service applicants turned away by traditional banks and credit unions. Richmond Hill private lenders specialize in these difficult-to-place mortgages. A private lender mortgage can also improve your credit score.
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%.
Richmond Hill Real Estate
Richmond Hill is also close to other hubs in the GTA, including Markham, Vaughan, New Market and Scarborough. Some of the major employers in Richmond Hill include BMW Group Canada and Apotex Inc. Currently, Richmond Hill real estate is a good investment. Current MLS® stats indicate that the average price for a house in the area is $1,483,280 as of May 2024. There were also 573 new listings in the area.
That represents a monthly decrease of 1.7% and a yearly decrease of 2.3% in price. Finally, the most recent numbers report that 192 homes were sold in the last 28 days, with an average of 18 days on the market.
How do Richmond Hill’s demographics come into play? The town’s demographics report that the median age is just over 42. 59% of the people living in the town are families with children. Some of the best neighbourhoods in Richmond Hill include Mill Pond, Northridge, Richvale, and Crosby.
Quick Private Lender Funding
A traditional bank might not be the best choice if you’re looking for quick private lender funding in Richmond Hill.
Many of these real estate transactions are susceptible to delays that can cause the deal to fall apart. Private lenders specialize in funding that’s generally faster than banks.
We are able to provide funds in a single day when required. The private lenders we deal with lend all across Ontario including Richmond Hill.
Mortgage Broker Store has over 15 years of experience working as private mortgage lenders in Richmond Hill. Get some more information and a free quote today. Jonathan Alphonso and our team specialize in connecting clients with the perfect private lender tailored to their needs.