Mortgages in Canada
As lending regulations become increasingly strict, private mortgage financing is emerging as a significant source of mortgage funding. Often, there are situations in which banking institutions are unable or unwilling to lend. In these cases, seeking out a private lender becomes a preferred option.
A private lender is an individual or an organization that advances funds in exchange for a mortgage on agreed terms and conditions. Essentially, a private mortgage is a bridge or mortgage loan that is secured by real estate. The most common situations funded by private lending tend to be properties that are nearing foreclosure, or applicants with below average credit, however there are many other situations in which a privately funded mortgage can assist: Construction projects, quick closes for property acquisitions and commercial financing for property types not supported by banks, to name a few.
Private lenders are increasing in numbers, as real estate becomes a more lucrative investment than the stock market. Many private lenders tend to use their services in a regional nature, as specific market knowledge is essential when dealing with what can be viewed as high-risk investment opportunities. It is important to note that privately funded mortgages tend to carry slightly higher interest rates than traditional mortgages, and often include lender fees.
Some of the benefits of a privately funded mortgage include:
- Interest only payments
- Second mortgages available at a higher loan-to-value ratio than a bank would offer
- One or two year terms are available
- Lending decisions are made quickly
If you require short-term real estate secured funding, or are simply in need of an alternative means of acquiring a mortgage, private lending could be your solution.
Mortgage Solutions
As lending regulations become increasingly strict, private mortgage financing is emerging as a significant source of mortgage funding. Often, there are situations in which banking institutions are unable or unwilling to lend. In these cases, seeking out a private lender becomes a preferred option. Learn more.
Home Purchase
With current lending requirements becoming increasingly tighter, qualifying to buy a home can sometimes be challenging. It is more common in today’s environment to see lenders requesting a larger down payment, or declining clients who have reasonably minor blemishes on their credit. Learn more.
Home Improvement
Improving or renovating a home can be done for a number of reasons, but the most common reason tends to be for personal enjoyment. Opportunity and timing don’t always match up, and Advanced Alternative Lending can assist in covering short or longer term gaps in financing when considering larger or smaller home improvement projects. Learn more.
Debt Consolidation
If you use your home as collateral for a debt consolidation loan, you may be able to negotiate a lower interest rate for all your combined debts, and extend your repayment term, therefore lowering your payments. Learn more.
Investing
If you have equity in your home you may be able to access it and use it to purchase investments, invest in a business or even pay off higher debt credit cards and loans and used the cash flow saved to invest. Learn more.
Funding Education
As education costs continue to climb, sometimes the only way to keep up is to borrow money. Be it for yourself, your spouse or your children, there are a number of solutions including government loans, lines of credit or borrowing against real estate. Learn more.
Self Employed
For self employed individuals, it can sometimes be difficult to qualify for a traditional mortgage. Lenders focus on several factors when making the decision to approve or decline a mortgage application, and reported income is one of the main criteria. Learn more.
Separation / Divorce
Life doesn’t always work out as planned and you don’t plan for a marital breakdown. Paying accumulated debt can be daunting, in some cases one spouse is left to pay bills on their own. You may need to draw from your home equity to pay credit cards or buy out your former spouses portion of the matrimonial home. Learn more.
Private Mortgage Rates
Interest rates on private mortgages can vary significantly depending on a number of influences, in much the same way as traditional institutional lending rates do. Learn more.
Credit Repair Tips
Credit Score
Keeping yourself aware of what is going on with your credit is very important. Credit Bureau agencies have various programs available for you to use in order to check your credit score on the spot or sign up for a credit monitoring service. Continue reading.
Bad Credit
When unforeseen circumstances cause your credit score to drop, it’s nice to know there are steps you can take to repair it. Click here for some tips from the Financial Consumer Agency of Canada (FCAC) on how to improve your credit score.
Bankruptcy
Filing for bankruptcy can provide much needed relief to debtors who have come across unfortunate circumstances. Once bankruptcy is declared, unsecured creditors are no longer able to garnish your wages or initiate collection. Read more.
The Government of Canada provides information on mortgages via the Financial Consumer Agency of Canada. Visit their site for resources.