The government strictly controls Canadian banks, a situation which causes potential customers to turn elsewhere for loans. Private mortgage lenders in Stouffville exclusively service the hard-to-place mortgages that were turned down by banks. They do not follow the same rules as banks and can, therefore, help people who don’t qualify for traditional bank loans. Private lenders look at equity in a property rather than credit score, allowing them to loan to low credit, insufficient income and other circumstances that wouldn’t qualify for a normal bank loan. With the money, individuals can meet different financial goals, including paying school fees, home upgrades or living expenses.
Mortgages From Private Lenders in Stouffville
Stouffville private lenders typically issue loans as registered mortgages on a property. This arrangement allows them to sell the property and recover their investment if a client is unable to repay the loan as agreed. The loan amounts start at $20,000 and are generally expected to be repaid within one year unless the client requests otherwise. For riskier second mortgages and loans with no income verification, private lenders charge higher fees to mitigate the risk and try to recoup as much of their investment as possible before a potential default. Private lenders are individuals or companies seeking profit from real estate, particularly drawn to Stouffville due to high appreciation rates in the area.
Reasons for Needing a Private Mortgage
When applying for a private mortgage, clients must state their reasons for needing the money. Unlike banks, private lenders are very lenient and accept any reasonable response. Some common explanations include:
- To pay off high-interest debts
- To pay school fees for university
- For living expenses after losing a job
- To pay for home repairs or renovations
- For business funding
Private lenders target individuals who can’t get bank loans or those who simply want alternatives. Private lenders in our network can rapidly provide mortgages to those rejected by banks. This is very important to people facing a power of sale or foreclosure.
Fast Financing From Private Lenders
Major Canadian banks have a long, tedious mortgage approval process. It is impossible to speed this up even if you have all the necessary documents in place. The banks’ system is very disappointing, considering that real estate deals are very time-sensitive. A power of sale notice, for example, means that you could lose your home in a short time. The best solution for such circumstances is to approach private lenders who can process funding much faster than the banks. If need be, it can only take 24 hours to get funding from a private lender. Besides Ontario, our network also loans to other Ontario Cities and towns.
Approval Criteria for Private Lender Mortgages
To issue loans, private lenders focus on the debts and price of a property in the market. This is much different from banks, which rely on credit scores to decide who to loan. Private lenders must calculate the loan-to-value ratio of a property (LTV) to see which homes provide more investment opportunities. The LTV ratio is the most important factor for a private lender whose main interest is in the real estate market.
The LTV ratio is the percentage of the property’s value owed in mortgages. If a homeowner has a home worth $1,000,000 with a $500,000 first mortgage and is requesting a $250,000 second mortgage, the LTV ratio for the requested mortgage can be up to 75% of the property’s value. To get the lowest interest rate, you will need a loan-to-value ratio below 65% and enough income to cover the monthly interest payments. Private lenders will offer a rate between 8% to 12%. The lower the LTV, the better the rate.
A registered mortgage may grant power of sale, prioritizing payments from first to last, potentially leaving insufficient funds for a private lender in Stouffville to recoup after a power of sale.
Information on Lenders in the Stouffville Real Estate Market
Stouffville is in Ontario, a province which is often in the news over its real estate market. Most recently, the News media have noticed double-digit real estate appreciation rates, which explains the sudden interest in private real estate lending among Stouffville’s residents. These individuals are looking to generate extra income from a stable real estate market, which has been predicted to continue increasing. As a province, Ontario is Canada’s economic powerhouse and no doubt one of the best places to reside in the country.
Looking for expert guidance in navigating the world of private mortgage lending in Ontario? Look no further than Mortgage Broker Store. Jonathan Alphonso and our team specialize in connecting clients with the perfect private lender tailored to their needs. Whether you’re seeking a first mortgage, second mortgage, or specialized loan, we’ve got you covered. Call 416-499-2122 or email ron@mortgagebrokerstore.com to start your journey toward financial solutions today!