A hit to the pocketbook may also have put your plans for applying for mortgage loans on the back burner. Perhaps you were also contemplating other short-term loan options for pressing financial needs including home renovations, tuition, bridge financing, or a consolidation loan to pay off high-interest credit cards.
Atlantic Canada based Private Lenders Can Provide Useful Financing for Differing Needs
In Atlantic Canada, like other areas of the country, the economic needs of the individual have not gone away even though the virus may have stopped many in their tracks. You do not need to put off short-term financing or mortgage loan applications. There are options available that make financing a relatively easy and quick process, even in these uncharted times.
At Mortgage Broker Store we can work around the sometimes unavoidable financial obstacles that the borrower in Atlantic Canada may be facing. We understand the unique challenges facing Atlantic Canada- based borrowers and have an established network of Private Lenders in place to help. We will help you navigate the private lending waters. It is important to know that there are more options available.
The Different Types of Loans Atlantic Canada Based Private Lenders can Offer
In Atlantic Canada, private lenders are approached regularly by borrowers with differing needs. Some borrowers may be seeking to obtain mortgage loans of differing types. However, it is important to note that private lenders can also be a potentially attractive alternative for the borrower seeking other types of short term financing beyond mortgage loans including:
- Consolidation loans-
- Home equity lines of credit (HELOCs)
- Reverse mortgages
- Home Improvement loans
- Bridge loans
- First mortgages
- Second mortgages
- Third mortgages
Unique Advantages offered by Atlantic Canada Based Private Lenders
Generally, private lenders can offer unique opportunities that the banks may not be able to. The advantages that private lenders can offer the borrower fall into several broad categories:
- Short term financing options
- Faster processing times
- Less reliance on credit scores and income
- Diversified loan options to offer the borrower
Let’s Look at these Advantages a Little more Closely
- Short-Term Loan Lengths– When approaching a bank it is important to know that credit history will play a very big role in determining mortgage eligibility. Banks tend to offer loans with longer amortization periods ( typically 25 to 30 years) and require exemplary credit. Banks also prefer borrowers who can prove yearly salary. In contrast, when approaching a private lender, there are many short term mortgage loans available (typically 6 months to 36 months) with less reliance on creditworthiness.
- Short Term Financing options– Banks will also require stringent criteria when borrowers may be seeking other types of short-term financing. This can be a deterrent for some borrowers. Atlantic Canada-based private lenders will be able to offer short term financing solutions with less paperwork and less reliance on credit scores (Beacon Scores). Loans that will include consolidation loans, Home Equity Lines of Credit (HELOCs), Home Renovation loans, bridge financing, and personal loans for paying tuition for example.
- Less Reliance on Credit Scores and Salaried Income– Credit scores and credit reports represent a snapshot of a borrower’s overall creditworthiness. Other criteria will be considered by private lenders when assessing loan applications. Borrowers will likely be required to prove a larger down payment. Also, the property in question when applying for a mortgage will be assessed carefully by looking carefully at the appraisal. Other forms of income will be considered beyond a full-time salary. Income including investment income or spousal and child support monthly payments.
- Faster Processing times– This is exactly as it sounds. While processing times may be measured in weeks through the banks. Private lenders will be able to process loans in a few days or even same-day processing options may be available.
Types of Lenders Available in Atlantic Canada
- A Lenders– Many borrowers are aware of only major banks as a lending source when contemplating applying for a mortgage. These big banks are considered to be A lenders. They will loan out mortgages to borrowers with exemplary credit and to usually long term salaried employees. The “stress test” that borrowers are subjected to is very stringent. loans are approved based on credit scores of 700 and over and sufficient proven yearly salary. A Lenders will usually be able to charge 2% on loans with minimal fees
- B Lenders– These lenders represent Credit Unions and Trust Companies. Although borrowers will be assessed on similar criteria to the big banks, including base yearly salary and creditworthiness, these lenders will accept a lower overall credit ( beacon score) than their A lender counterparts. A Trust Company or Credit Union will accept a score of 600 if the salary is deemed sufficient. B Lenders will usually charge between 4% and 6% on loans. Borrowers should expect to pay ½% in fees.
- C Lenders– These lenders represent private lenders. Private lenders can loan out on their own with their funds, with partners in a syndicated mortgage, or as part of a Mortgage Investment Corporation (MIC) with pooled investment money. Private lenders will be able to look past credit obstacles and approve self-employed or contract employees. Fees will be higher, typically 3% to 6% of the overall loan, and will generally charge anywhere between 7% and 12% interest on these loans.
Mortgage Broker Store Can Help you Achieve Your Financing Goals
Like any area in Canada, Atlantic Canada poses aspects specific to the region that will influence the decisions of private lenders. The major industry in Atlantic Canada continues to be fisheries. The nature of this industry and the employees that work within the sector make private lending an attractive choice. The majority of the positions in this sector continue to be seasonally based making loan applications to the banks more difficult. Private lenders can help fill in this borrowing gap by taking into all sources of income when assessing loan applications.
Mortgage Broker Store understands the needs of the borrower and we are always striving towards finding the best match when looking at your particular mortgage and financing needs. We work with a network of private lenders across the country and are more than happy to guide you in important decisions that you will be making during the private lending process.