Banks are under strict control by the government and this leads to many people turning to private lenders. Private lenders do not have to adhere to the same rules so they can easily service hard to place loans that would be turned away by banks. You cannot get a bank mortgage with a poor credit score, leaving you with only private lenders to help. The private mortgage lenders in Waterloo, Ontario are willing to offer loans to people who cannot access Canadian Bank loans owing to poor credit score.
Private mortgage lenders in Waterloo prefer to loan out their money in form of registered mortgages secured by a property. This is because the Ontario Mortgage Act of Ontario allows holders of registered mortgages to sell off a property if a client fails to pay as agreed. You can get as little as $20,000 to be paid in one year’s time. The borrower can negotiate an extended term so that they can pay lower instalments without much hassle. Second mortgages are an example of investments that poses more risk, leaving a private lender no choice but to charge high interest fees. The money is used to pay professionals like real estate lawyers and appraisal among others needed along the mortgage set up the process. Private lenders are interested in real estate and are therefore drawn to Waterloo, with its highly appreciating property prices.
Approval Criteria for Private Mortgages
When you apply for a mortgage, all the private lender focuses on is the value of your home and its debts. Banks are guided by credit score when deciding on loan applications but that isn’t a concern for private lenders. They may not be sensitive to credit score but private lenders hugely mind your equity and must, therefore, calculate the LTV of your property before offering any amount. Loan to value ratio is obtained by dividing total debts by the appraised value of a house. This value should never surpass the 75% threshold upon which private mortgage lenders in Waterloo will loan. If your home is worth 1,000,000 and has 900,000 in debts, you will not get a private mortgage in Waterloo. Private lenders take on huge risks by loaning people with bad credit or without an income that they will not dare loan to any property with excess debt.
Reasons why People Need Private Mortgages
When applying for a mortgage you will be asked to state why you need the money. Private lenders are very lenient compared to banks who often reject loan applications for the reasons given for needing the money. There are countless possible uses for a private mortgage but some of the most common include:
- For living expenses after being laid off work
- To stop a power of sale
- For home improvement or repairs
- To pay college or university fees
- To pay off high-interest loans
Anyone who was rejected by banks may turn to private lenders who mainly care for the property and will, therefore, judge applicants solely on equity in their homes presented as security.
Quick Financing from Private Lenders
Bank loans take a long time to process due to the strict government requirements. This can be a big hassle when funds are urgently needed to facilitate a home sale. The only hope is in private lenders who are ready to process the mortgage much faster. If the situation so demands, you can get the funds needed in a day. Private lenders do not follow the same rules as the banks and can even tailor mortgage solutions to the customers’ needs.
Information on Private Lenders in the Waterloo Real Estate Market
There are more private lenders in Waterloo seeking to eke a living from the promising Ontario real estate. Ontario province has long been discussed for its part in real estate, with prices literally skyrocketing in the past couple of years. Waterloo real estate is in high demand as people strive to get closer to Toronto with some of the highest real estate prices in the province. Ontario is both an economic powerhouse and one of the best places to stay in Canada.