A private mortgage lender is any individual or business that offer loans, specifically loans secured by real estate. A private mortgage lender is different than banks and other lenders because they approve loans based on the value of the applicant’s property. Private mortgage lenders do not require applicants to have a high credit score, income or a good track record of paying back loans.
Private mortgage lenders are commonly used by people looking for quick access to funds, as these loans can be finalized within a week if necessary.
The three most common private mortgage lenders in Barrie are mortgage investment corporations (MICs), syndicated mortgage lenders and individual lenders (such as family, friends, or investors).
MICs are companies that pool a group of investors to fund projects that require mortgages on a case-by-case basis.
Syndicated mortgage lenders use a group of investors who each contribute funds to a project. When working with a syndicated mortgage lender you can examine your mortgage documents and see how much of the mortgage is owned by each investor.
All these private mortgage lenders in Barrie can be found through a mortgage broker. Click here to find a private mortgage lender in Barrie and get a free quote.
How to Get Private Mortgage Financing
To get private mortgage financing you can contact the private lender directly or go through a mortgage broker.
Private mortgage lenders usually approve mortgages up to 80 per cent of the property’s market value.
These mortgages can be used for home renovations, second mortgages or investment in commercial properties.
Private mortgage lenders in Barrie are just as secure as traditional lenders. Just like banks and other financial institutions, private lenders must follow the law according to Ontario lending guidelines.
If a borrower fails to meet their mortgage payment obligations, the private lender can utilize power of sale to recuperate the balance of the mortgage. Learn more about power of sale and how to stop it here.
Why Private Mortgage Lenders Invest in Barrie
Located on the shores of beautiful Lake Simcoe, Barrie enjoys a host of unique landmarks and nature settings that create the perfect mixture of fun and function.
Barrie is growing in population and prosperity. It has a population of nearly 200,000, where the average age of residents is 38, reflecting the many families living there. The average household income is $100,000. For these reasons, Barrie offers mortgage lenders a huge potential market of future home and business owners.
Barrie is primed for development, and the real estate market knows it.
The Barrie & District Association of Realtors reports that the average price of residential homes in Barrie May 2020 was $541,109, up nearly 10 per cent from May 2019 when the average price was $492,714.
Neighbouring Essa has also seen a 6 per cent increase in residential house prices since last year with no sign of slowing down.
Private Mortgage Rates and Fees
Private mortgage lenders usually charge interest rates between 7 and 12 per cent along with broker fees of 3 to 6 per cent. Since private mortgage lenders have higher interest rates than banks and other lenders, they are often used for shorter term loans or mortgages.
The interest rates and fees charged by individual private lenders (such as family, friends or private investors) will vary significantly depending on the lender and terms of the loan.
Private Mortgage Brokers in Barrie
For many people, finding a private mortgage lender that fits their needs is difficult and time-consuming. Generally, private lenders do not advertise to the public. But finding the right information is easier than you think.
The Mortgage Broker Store is Ontario’s best source for information on private mortgage lenders in Barrie and has a proven track record of connecting people to lenders.