How to get a private mortgage in Newmarket despite bad credit?


There is no doubt that the Greater Toronto Area and the GTA are very popular places to call home. Newmarket is no exception.

There is no doubt that the Greater Toronto Area and the GTA are very popular places to call home. Newmarket is no exception. Located on the banks of the Holland River just minutes from downtown Toronto, Newmarket offers a more relaxed suburban lifestyle with all the perks of a big city. Many parks, cafes and shops are accessible to those who live in the area.

Newmarket has a population of 84,224 as of the last census in 2016. With local amenities, a highly skilled workforce, and all the perks of living in a large metropolitan area, Newmarket remains an attractive place to live.

The real estate numbers reflect the desirability of the Newmarket area. With impressive real estate appreciation throughout 2020 and into the second half of 2021, Newmarket’s housing market remains robust despite the protracted Covid-19 pandemic from which we are still recovering.

According to the July Newmarket Housing Report, the average price of a single and single home has risen to $ 1.1 million. This represents a 6.1% appreciation since June 2021 and a huge 31% year-over-year increase from July 2020.

These housing numbers encourage some to apply for mortgage financing. Existing homeowners have the added benefit of tapping into the equity accumulated in their property to use in the form of a second mortgage.

Taking advantage of the strong housing market in the GTA can be an attractive idea. However, what options are available to homeowners who may have poor credit? While banks may routinely deny second mortgage financing to homeowners with damaged credit, well-established private lenders are available in the Newmarket area to help negotiate private second mortgage options to close the economic gap. .

How are private mortgages structured?

While banks regularly subject homeowners / borrowers to highly structured mortgage stress tests in order to qualify for mortgages and refinancing, other lenders are available across Ontario and the Newmarket area.

Instead of relying on exemplary credit scores, substantial, easy-to-calculate family income, private lenders (called C lenders in the mortgage industry) are able to look beyond these narrow approval criteria and to take into account other variables when determining the terms and amounts of mortgage loans. .

Mortgage Broker Store can help you directly negotiate second mortgage loans by looking at your overall and unique financial situation. With access to an extensive network of private loan options in Ontario, Mortgage Broker Store is able to direct you to a suitable private lender who will be able to negotiate suitable terms on a private mortgage.

There are different second mortgage loans to choose from depending on your specific refinancing needs. Whatever type of mortgage you think best meets your mortgage goals, several characteristics of private mortgages determine how they are structured, including:

  • Private mortgage financing is short term – This is very attractive to those who need to refinance and take out a second mortgage option for a shorter period of time providing both immediate funding and long enough to help restore credit if the loan is paid off time and in full for the duration of the loan. Most private mortgages have terms of 6 months to 3 years.
  • Private loans are negotiated quickly and the process is simple – While banks tend to take several weeks to process mortgage loan applications, private mortgage financing can be negotiated within days. Most second mortgage loans are processed within 1 to 4 days. It is very interesting for those who need immediate refinancing.
  • THere are different secured private mortgage options: Debt Consolidation Loans, Home Improvement Loans, Home Equity Line of Credit (HELOC), Home Equity Loans, or Primary Mortgage Refinance.

What criteria are used to calculate a private mortgage loan?

Private lenders will focus on several key areas when determining both the terms and the overall mortgage amount. This allows a private lender to lend mortgage financing based on criteria that go beyond a borrower’s overall credit rating.

Essentially, private lenders base mortgage calculations on valuing an owner’s property that is used to leverage the private mortgage loan. Private lenders will calculate:

  • The loan-to-value ratio (LTV) by evaluating a current appraisal of your property. As a general rule, since private secondary mortgage financing is considered higher risk, a private lender will not lend beyond a 75% LTV which is up to 75% of the appraised value of your property.
  • TThe degree of equity that a homeowner has in their home. The overall percentage of equity over what is owed on your first mortgage will go a long way in determining the final mortgage amount. Private lenders will need a minimum of $ 70,000 in equity to approve a homeowner’s mortgage application.
  • Any additional financial assets (if applicable)
  • Consider the location of the property – As with anything related to real estate, location is paramount when negotiating the terms of a private mortgage. It is considered less risky for a private lender to lend mortgage financing for a property in a desirable area.
  • General condition of the property – Just as location is an important variable, so is the current condition of your property. Private lenders will assess whether there may be water damage, mold or foundation issues. Conversely, any updating and renovation will increase the attractiveness of your property and help secure private mortgage financing.

What rates and fees do Newmarket private lenders typically charge?

Generally, the interest rates associated with most private mortgages are generally between 7% and 12% depending on the financial situation presented by a particular homeowner. Most private loans do not require the homeowner to pay interest on the mortgage during the life of the mortgage.

There will also be fees associated with private loans. These fees will cover the lender’s fees and administrative costs associated with processing a private loan option. In general, the fees charged by most private lenders will be between 3% and 6% of the total cost of the mortgage.

When setting up a private mortgage, it is important to bring all the necessary documents with you, including a recent home appraisal, proof of all sources of income, a list of all assets. financial statements as well as the last three years of disclaimer. It will also help to be clear about which second mortgage loan would best suit your short-term financial goals.

The Mortgage Brokers Store will help guide you to private mortgage options

If you’re a Newmarket homeowner or a borrower looking to get mortgage financing, don’t let credit problems stop you from buying a home or withdrawing hard-earned equity from your property to pay for necessary expenses.

Mortgage Broker Store has access to an extensive network of private lenders in the Newmarket area. A private lender will be able to sit down with you and discuss your options directly, which will help you meet your mortgage goals.

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