Private Mortgages for Waterloo Property Owners
The Tri-City area of Ontario is
one of the most attractive areas for investors. Thriving, well-established
communities, such as Kitchener, Waterloo and Cambridge have much to offer. Yet
some Waterloo homeowners have felt the effects of the recent economic climate.
Many are struggling with high
debt-to-disposable income ratios, and,
unfortunately, many have been turned down by conventional lending institutions.
If you are struggling with a significant debt load or an overdue tax bill, or
if you are trying to find funds to send your child to university, you know how
financial stress can affect your budget and your peace of mind.
It can come as a real shock when
your bank refuses to lend you money based on the equity you have in your home.
But banks are held hostage by many different types of regulations designed to
minimize risk over the hundreds of thousands of clients they serve. If your
situation doesn’t conform to these stringent regulations, bank employees have
little flexibility to offer you a loan. You may be refused due to bad credit
reports or bankruptcies in your past, current unpaid bills, or simply because
your self-employed income is not as predictable as the bank would like.
However, there are other players
in the mortgage field. When the bank says "no”, you can turn to a private
lender. In order to find the right lender, you’ll have to first contact a
private mortgage broker.
- This professional has to take courses and pass exams, as well
as serve an apprenticeship before receiving a license. A private mortgage
broker helps you put your proposal together into a package that will be
attractive to investors. He or she will assess your needs and match you with a
lender. Most private mortgage brokers are knowledgeable individuals who have built
strong relationships with various lenders. The broker usually charges a fee for
his or her services.
- Private lenders range from single individuals to entities that receive
their funds from individuals and groups such as MICs or Mortgage Investment
Corporations. These lenders tend to focus less on the record of the borrower
and more on the condition, location and saleability of the property, as well as
the borrower’s amount of equity in the property. This makes them more likely to
take a "risk” on a borrower whose credit record may not be perfectly clear.
There are several
characteristics of private mortgages to be aware of. First, most charge higher
interest rates than the bank does for similar loans. However, many rates are
comparable. Be sure you are well versed in what the rates are for various
Second, most private
mortgages charge processing fees. You may also have to pay legal costs for
drawing up the contract, and, if a current appraisal of your property isn’t
available, you may have to pay for an assessment.
Third, private mortgages are
almost always short-term arrangements, meant to bridge the borrower until bank
funding can be obtained. Most terms are for less than three years.
Call a private mortgage
broker today and ask for a free consultation. Learn how you can get the funds
you need, now!