Mortgage Rates for Ajax Homes
If you’re considering refinancing
the mortgage on your home in Ajax, you may find it difficult to access the
lowest interest rates. Unless you have an impeccable credit rating or can
afford a large down payment, you will likely pay a higher rate. Banks have to
follow very restrictive regulations designed to minimize risk over a huge
number of clients, which means that some
clients are considered higher risks than
others. In fact, some homeowners trying to access funds based on the equity
they have in their property have difficulty doing so at traditional financial
If you have been refused
refinancing by your bank, you may not realize that there are alternative
lenders available. Private mortgages play a role in the Ontario financial
landscape, providing short term funding for property owners with equity in
their homes. Generally speaking, private lenders are less interested in the
owner’s credit rating and more interested in the value, condition, location and
saleability of the property in question.
Brokers and Private Lenders
In order to obtain a private
mortgage, you’ll need to work with a private mortgage broker. These professionals undergo training, write exams and serve an apprenticeship
before they’re licensed. They specialize in finding mortgages for clients who
are unable to access funding from conventional financial institutions.
A private mortgage broker
will work with you to create a package that will be attractive to investors. He
or she will then approach a lender whose needs match yours. If the lender is
interested, your broker will negotiate mortgage terms agreeable to both
Most brokers charge a fee,
but initial consultations are free, so contact one and explore the options open
to you. Sometimes, a private mortgage broker can point in the direction of
other solutions to financial challenges, such as debt consolidation.
Points to Consider
If you do opt to pursue a
private mortgage, you should take into account the differences between a
private mortgage and a conventional bank product. These may include:
- Term -
Private mortgages are almost always short-term loans, ranging from one to three
years. They’re meant to bridge a funding shortfall for clients.
- Speed - Because lenders have a smaller pool of money, they don’t like it to be idle.
Once an offer is on the table, you will have to act fairly quickly, or it may
go to another borrower. The advantage to this characteristic speed is that it
usually doesn’t take long for a mortgage application to be approved and funded.
Rates - Because the private lender is assuming more risk, interest rates may be
higher. However, be sure to research these rates to make sure that your
lender’s rates are in line with other private lending interest rates.
- Fees -
You will probably be asked to pay your broker’s fee, plus a flat fee to the
lender. In addition, there may be processing fees for each payment, legal fees
for drawing up a contract, and, if necessary, a fee for an assessment of your
property. Be sure to factor these into the cost of the mortgage.
Contact a private mortgage
broker to discuss your situation. A private mortgage may be just right for you
and your family.