Canadian banks face many government regulations about loans that turn many away from them and to the less regulated private lenders. 600 credit points are needed for anyone to qualify for a bank loan but few people meet the cut. Property owners do not need a credit score to get them a mortgage, as private lenders are willing to loan on equity. Most private mortgage lenders in Welland specialize in those hard to place mortgages that the banks would not accept. They have more privileges than banks meaning they do not have to follow a strict code and so if you have been rejected by a bank, private mortgage lenders may be in a position to help.
Mortgages from Private Lenders
Private Lenders in Welland only loan out money in form of registered mortgages secured against real estate. The private lender is allowed by the Ontario Mortgage Act to sell any property for which fees are not paid in full. A private lender will offer as little as $20,000 for a year but the borrower can negotiate a longer term if they need to pay lower amounts every month. For riskier mortgages (borrower has no income or a second mortgage) the fees and interest charged are higher than for ordinary bank loans. Private lenders are invested in real estate and the Welland market is particularly attractive as it has the highest appreciation rates in the country.
Approval Criteria for Mortgages from Private Lenders
To be approved for a private lender mortgage in Welland, clients must present a home as security. Instead of credit score like banks, private lenders look at the debts and market value of that property. This is helpful in calculating the property’s loan to value ratio, which ultimately determines who gets a loan and for how much. Private lenders in Welland will only lend to properties with LTV no greater than 85% on residential properties. LTV is calculated by dividing the value of mortgages by the most recently appraised price of a property. If for instance, you have a home that is worth $1,000,000 and 800,000 in debts the LTV is 80%, meaning you will get a loan from private mortgage lenders in Welland. The maximum LTV to which private lenders can loan in 85% to avoid making losses in the event that you are unable to honour the agreement
Reasons for Needing a Private Mortgage
You will be required to state your reasons for needing the money when you apply for a private lender mortgage. Banks might turn you down over the response but private lenders are more lenient. They tend to accept any reasonable explanation and some popular ones include:
- To pay off high-interest credit card debts
- For living expenses after being laid off
- To stop a power of sale or foreclosure
- To pay tuition fees for college or university
- For home repairs or renovations
Private mortgage lenders in Welland exclusively seek out those who were rejected by banks. Our network of private lenders can provide mortgages to individuals who were turned away by banks.
Rapid Financing from Private Lenders in Welland
Major banks in Canada are required to follow a comprehensive, time-consuming process when considering mortgage applications and there is no way of speeding things up. This is quite problematic especially for property sales that require money promptly. Private lenders follow a different mortgage approval process altogether and can, therefore, provide much-needed loans faster than banks. If the need arises, a private mortgage lender in Welland can process your loan in only a day. This could go a long way in helping you resolve a power of sale situation, or pay for emergency treatment.
Information on Lenders in the Welland Real Estate Market
Welland is a city right in the centre of Niagara and within a half hour’s drive to many important locations like St.Catharines, Niagara-Falls, and Port Colborne. The real estate industry in this city is as vibrant as in other parts of Ontario. The entire province is making news in the industry with some of the highest price appreciation on properties. Many people looking to supplement their income are turning to private real estate lending. Ontario is well known as the economic powerhouse of Canada and it is also the most desirable places to live.