Canadian banks are under strict government regulations which turn many away from banks and to private lenders who are less regulated. Banks need an impossibly high score of 600 points but private lenders do not bother with credit score. Many private mortgage lenders in Timmins specialise in providing hard to place mortgages that couldn’t be accepted by banks. They do not have to follow the same strict set of rules so they can accommodate people who were rejected by banks. Anyone with low credit or seeking more flexibility may look for a private lender mortgage with a home as security.
Mortgages from Private Lenders in Timmins
Timmins private mortgage lenders loan out money in form of registered mortgages secured against real estate. Under the Ontario Mortgage Act, a registered mortgage allows a private lender to sell property in default in an attempt to recoup their investment. The money given should ideally be paid in one year time and can be as little as $20,000. A borrower can negotiate a longer repayment period if they would like to repay loans in small, more affordable instalments. Riskier mortgages attract higher interest rates and fees. The fees are demanded upfront to pay staff, real estate lawyers, appraisal and others involved in arranging the mortgage. Private lenders rely on real estate to generate income and are drawn to Timmins, an area in Ontario with high appreciation rates.
Approval Criteria for Private Lender Mortgages
Private lenders are more concerned about the market value of a property and the debts on it when considering mortgage applications. Banks use credit score to inform their choice but this doesn’t bother private lenders who calculate the loan to value ratio on a property instead. The loan to value (LTV) ratio is calculated by dividing the total debts by the appraised value of a property. If your home is worth $1,000,000 in Timmins and has $700,000 in debts, the LTV is 70% which is enough to get you approved as most private mortgage lenders will loan to a maximum 85% LTV on a residential property. Loaning to LTV that is higher than 85% is dangerous as it might lead to losses even after a power of sale. Private lenders may not be sensitive to credit score but they avoid lending to properties with high debt.
Reasons for Needing a Private Mortgage
While applying for a private mortgage an explanation will be needed for why you need the loan. Private lenders are lenient compared to banks and accept many reasonable answers. The popular reasons include:
- To pay off high-interest loan
- For home renovations or repairs
- For living expenses after losing a job
- To stop a power of sale or foreclosure
- To pay tuition fees for university or college
Individuals who cannot get a low-interest loan at a bank are the kind of clients sought by private lenders. Our network of private lenders can offer loans to people who didn’t meet the banks’ criteria.
Quick Funds from Private Lenders
Major banks in Timmins and Other cities in Ontario must follow a strict, tedious loan approval process. This is a problem for property sales in urgent need of funds but there is no way to speed up this comprehensive process by the banks. Private lenders may help as they can move things much faster. If it is a major emergency, a private lender may be able to offer money in only 24 hours. Rapid financing is utterly important owing to situations like foreclosure or power of sales that aren’t reversible once activated. Our network of private mortgage lenders in Timmins also service other cities and towns in Ontario.
Information on Lenders in Timmins Real Estate Market
In Northeastern Ontario, Timmins City is an economy driven by extraction of natural resources. It is densely populated and the real estate industry has been growing steadily over the years. Ontario, in general, experienced a major surge in real estate prices leading many into private lending. Toronto and other cities experienced double-digit growth in the last couple of years which is great for real estate investors. Ontario is Canada’s economic powerhouse and one of the most desirable places to stay.