Mortgage Rates for Ajax Homeowners

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 institutions.
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 parties.
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.
  • Interest 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.


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