Private Mortgage Lenders Toronto
Toronto Private Mortgage Approvals
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Private mortgage lenders in Toronto Ontario approve private mortgage loans based on the equity in the borrower’s home. Getting approved for such mortgages from direct lenders in Toronto is quite simple.
Homeowners with credit score and income challenges can easily purchase a home or refinance their home equity with a private lender.
Toronto private mortgage lenders are not governed in with the same rules. Canadian banks require homeowners to qualifying based on traditional methods, based on their credit and income. Private mortgage lenders in Toronto Ontario only require the borrowers(s) to have equity in their homes. Even if homeowners or buyers have a bad credit score, the approval is not based on their credit history. Financing options for accessing home equity through a private lender does not require the homeowner to have good credit.
Reason For Getting A Private Mortgage
Most homebuyers in Toronto who do not qualify for a traditional mortgage when purchasing a new home or investment property will seek a private mortgage.
Homeowners will usually take out a private mortgage for many reasons such as:
- Debt Consolidation
- Home Renovation
- Paying CRA (Canada Revenue Agency) Income taxes
- Paying mortgage arrears to stop the power of sale process
How Private Mortgage Lending Toronto Works?
Direct private lenders in Toronto qualify homeowners and homebuyers based on the equity available in the home. Since private lenders are not governed by the same rules as banks, it makes it easier to qualify for a private mortgage in Toronto.
Private Lending Toronto Process Explained
A privately funded mortgage can be completed and funded as quickly as 48 hours from the time of application. There are a few steps involved in getting a private lender mortgage.
The first step in getting a privately funded mortgage is to apply with a private lender or mortgage broker by completing a mortgage application. The mortgage broker or private lender would order an appraisal using a list of accredited appraisal companies accepted by most private lenders in Toronto. An appraisal is to determine the market value of the real estate and also to determine the marketability and condition of the property being financed.
Once the lender is satisfied with the property appraisal, mortgage approval documents will be issued for signing.
Finally, the applicants will schedule to meet with their lawyer to finalize the mortgage approval and satisfy any conditions required by the lender. When all mortgage conditions are satisfied the private lender will issue mortgage funds directly to the real estate lawyer representing the borrowers.
Private Mortgage Rates Toronto
Toronto’s private first mortgage lending rates usually start at approximately 5.99% and can go as high as 8.99%. Most private lenders offering private first mortgages in Toronto will usually add a 1% to 2% lender fee. Private lending lender fees are normally deducted from the mortgage loan.
Lenders in Toronto offering second mortgages will usually charge an interest rate ranging from 6.99%. Lender fees can range from 1.5% to 4% of the private loan amount.
Private Lending Monthly Payment Example
A private first mortgage of $500,000, with an interest rate of 5.99% is calculated as ($500,000 x 0.0599)100/12=$2,495.83 per month. The private lender fee is calculated as $500,000 x 0.01 = $5,000.
It’s important to note that, by default most, if not, all private mortgage monthly payments are interest-only payments. The borrowers may choose to pay principal and interest, which usually comes with an amortization of 20 years.
Toronto Private Mortgage Terms
Private mortgage terms are usually for one year as the approval is based on the current Toronto real estate market. Most Toronto private lenders will provide a private mortgage with a short term, ranging between 6 months to 1 year.
When the mortgage comes up for renewal there may be a renewal fee charged by the lender.
The repayment of a private mortgage Toronto is based on interest-only payments.