Private Mortgage Barrie

You should consider using a private lender in the following circumstances

• Where your debt to income ratio is high
• If your credit score is preventing you from getting a mortgage from a traditional lender
• If you have recently been insolvent
• When you have insufficient funds for a down payment on the property
• If you earn income from a non-traditional source
• If you want to obtain a second mortgage
• If the property that you wish to purchase is not one that the banks would finance
• You need fast finance and don’t want to wait for a long approval process.

• Property value – the property must be in good condition. It will be appraised. This is the most important aspect for the private lender as the property is the collateral for the loan.
• Income – the lender will want to know that you can pay back the loan.
• Down payment – the minimum loan to value ratio is 85% so the minimum down payment that you will have to make is 15%. The larger the down payment that you make the better from a risk perspective.

Private mortgages in Barrie are more expensive than traditional mortgages and depending on the risk the additional cost can range from 2% over the bank rate to upward of 20%. The interest rate that you pay will be determined by the loan to value rate, the location of the property and the overall perceived risk.
There are also fixed costs involved with private mortgages. These include appraisal costs, legal fees and broker fees. In some cases, the costs can be included in the mortgage.