Canadian banks are under control by the government. The rules placed on these institutions discourage a large part of the population. People without the high credit score required by banks can only turn to private mortgage lenders in Sault Ste. Marie. They are not governed by the same rules as banks so they can be able to service the hard to place loans that were turned away. Banks require borrowers to present 600 credit score or higher when applying for a mortgage. Unfortunately, only a small number meets this criterion but banks do not negotiate their rigid mortgage approval criteria.
Mortgages from Private Lenders
Lenders in Sault Ste. Marie prefer to lend money in the form of registered mortgages on the property. This is simply a safeguard because the registered mortgage agreement gives them the power to sell any house in default. A private lender will lend as little as $20,000 for a one-year term but you can negotiate a shorter or longer loan payment duration. Those who choose an extension are low-income earners who would like to make monthly instalments more affordable. Riskier mortgages attract higher fees compared to bank loans because the lenders must cushion themselves from losses in the event you default on payments. The money is required to pay real estate lawyers and appraisal among other professionals needed to process the loan. While they can sell your property, the Ontario Mortgage Act requires that the first lender be paid first before the second and third can make their claims respectively.
Approval Criteria for Mortgages from Private Lenders
Private lenders are interested in total debts and the market value of a property when evaluating loan applications. Banks consider credit score when making a decision but that isn’t important to private lenders who have other methods of measuring credit worth. They calculate loan to value ratio of the property by dividing the debts by appraised property value. Many of the private mortgage lenders in Sault Ste. Marie will not loan to property that exceeds the maximum threshold of 85% LTV. Private mortgage lenders in Sault Ste. Marie are not so keen on credit score but being sensitive to risk, they avoid loaning to properties with high debt. This is to ensure that they stand a chance of recouping once a power of sale is activated.
Reasons for Needing a Private Mortgage
When applying for the mortgage you will have to state why you need the money. Do not worry, though, because private lenders are very lenient, unlike banks that might use the response to disqualify your application. The common uses of private mortgage money include:
- To pay for home repairs or renovation
- To pay school fees
- For living expenses until your salary arrives
- To pay off other high-interest loans
- To resolve a power of sale or stop a foreclosure
Anyone who could not get a bank loan can turn to the private lender offering the ideal alternative. Our network of private lenders in Sault Ste. Marie is ready to provide competitive private mortgages for their target clients. Being so flexible, private lenders can even design custom private mortgage solutions for each client.
Rapid Financing by Private Lenders
The major Canadian banks follow a comprehensive process of mortgage approval which cannot be sped up under any circumstances. This is a problem for people with an urgent need for funding. Private lenders are able to arrange a loan much faster with some providing the funds in only a day. Our lenders in Sault Ste. Marie also loans to people with real estate properties in other cities and towns across Ontario.
Information on Lenders in the Sault Ste. Marie Real Estate Sector
Sault Ste. Marie is located in Ontario, a region in Canada most famous for high returns on real estate. Many people are looking to buy property in Ontario and Sault Ste. Marie has become a location of choice by private real estate lenders. Toronto and several cities that make up Ontario province have seen huge increases in home prices over the last few years. The province is considered to be one of the best places to live in Canada.