NewmarketMortgageServices.ca has a new network of private lenders in Markham. These are individuals or enterprises that specialize in the provision of mortgages that don’t meet banks’ approval criteria. It takes 600 credit score for a bank to service any mortgage but that is a near impossible feat for residents to accomplish in Markham. For people with poor credit or low income, the only source of credit is private lenders who consider different parameters from banks when making lending decisions. They are under less severe government regulation than banks so they can risk servicing hard to place mortgages turned down by banks.
Private Lenders of Bad Credit Mortgages in Markham
It is impossible to get a bank loan with bad credit, leaving people with the alternative of private lenders who look at equity in a property and not credit score like banks. Private lenders eke their profits from real estate and therefore lend on equity. Their unique approval criteria accommodate individuals who were turned down due to low income or bad credit. Owing to the risk posed by clients with bad credit, private lender mortgages come at higher fees compared to regular bank loans. The easiest way to access loans from private lenders is through mortgage agent who will broker the deal between customers. Mortgage agents can request multiple quotes on the clients’ behalf and recommend the best offer that will satisfy each one.
Types of Mortgages and Services Offered by Private Lenders
Banks follow a strict loan approval process but private lenders are free to choose their loan customers as they want. These private entities, therefore, have more types of mortgages and a variety of services to offer compared with institutional lenders. They can help with stopping a power of sale, foreclosure, refinance an existing mortgage, renovate a property or an education loan to pay tuition fees for college.
Second Mortgages from Private Lenders
Remaining equity in a property can be leveraged to get a second loan offered by private lenders. Before releasing any funding, a private lender must calculate the loan to value ratio to establish that a property is indeed creditworthy. If a home worth 1,000,000 has debts of 900,000 its LTV is 90% which isn’t acceptable to a private lender. Loan to value is calculated by dividing debts by the appraised property value. The private lender network in Markham will only loan to a maximum 85% LTV.
Private Financing to Stop a Power of Sale
People who are unable to repay their debts as agreed with the lender face a power of sale or foreclosure. Lenders prefer the less expensive method of recovery which unfortunately gives very little time for the borrower to resolve the issue. Once activated, it is impossible to stop a power of sale unless with enough cash on hand. NewmarketMortgageServices.ca’s new private lender network is able to help stop a power of sale by providing funding in as few as w24 hours. For the financing to be approved as fast as possible, the customer must have all documents relating to the power of sale on hand.