Scarborough is part of Toronto, the largest city in Canada with a very strong housing market. This is the best place to get funding from private lenders. We have many in our network who will offer money in the greater Toronto. Private mortgage lenders in Scarborough accept the self-employed or people with bad credit. If you call us, we can discuss your issue and see what financing options suit you best. Eventually, you will get a private mortgage that you can afford to repay in future.
Private Lender Mortgages
A private lender mortgage is a loan secured against real estate and not provided by large financial institutions. They are individuals or companies who decide to invest their own money in real estate. Most of them deliberately invest in Scarborough properties because of the high price increase and the possibility if selling real estate in default via the power of sale. The first lender is always the first to claim their investment after a power of sale followed by the second and subsequent lenders.
Private lenders can provide amounts ranging from $20,000-more than $700,000. Typically, the interest rates are between 7%-15%depending on the total value of mortgages, condition of property, and credit score among other factors. Private lenders are not eligible for government-provided insurance on mortgages and therefore require an initial fee to compensate for risk associated with private deals. Home appraisers, mortgage brokers, real estate lawyers are some of the professionals who must be paid in advance to process the loan. Those who get bank loans do not have to pay associated fees in advance as the banks usually agree to pay lenders directly as soon as the mortgage closes.
Private Lender Mortgage Approval Requirements
Private lenders in Scarborough have certain conditions that must be met before they can provide a mortgage. The most important factor is a loan to value. Many of private lenders are interested in owner-occupied homes and a loan to value ratio below 85%. For commercial property, private lenders in Scarborough need a value below 65%.
Private lenders in Scarborough want a value below 75% for rental properties. Such real estate must show strong flow of cash to support mortgage payments. These lenders may also look at your credit rating but that will not lead to rejection of your request. People with good credit can use it to negotiate low-interest rates on the mortgage but very low scores translate to high rates on private lender loans. Poor credit means higher risk because clients have already been unable to finish mortgage payments in the past.
Reasons to get a Private Lender Mortgage
Private lenders are able to offer money for various business or personal uses. Lenders ask what the money will be used for and that you are capable of servicing the mortgage. This information is usually needed for proper record keeping by private lenders unlike banks who reject applications based on equity. Some common roles for getting private lender mortgages are:
- Incapacitation that prevents people from working
- Paying off high-interest loans
- Repair or renovation of property
- Recent lay off from a job
- Self-employed or recently retired people who are unable to get bank loans
- An urgent need to have the money
Private lenders are the common alternative for people who do not qualify for regular bank loans. Private lender mortgages are typically more expensive than those offered by banks and come highly recommended as a short-term solution. We specialise in the provision of short-term, private lender loans and can help you get lower interest rates from banks when you are finished with the private mortgage.
Information on Scarborough Private Mortgage Lenders
In recent years, the entire Toronto area has witnessed rapid price increases created by high demand among consumers and investors. The real estate market here has some of the highest growth rates in Canada. The house prices and sales have increased over 20% from 2015 to 2016. City regulations that promote the building of condominiums have led to an increase in Condo units. The demand for semi-detached and detached home in Scarborough is still unmet. In Toronto, the selling price for a detached home was $1.2 million as at September 7, 2016.