Halton Hills is a unique location with specific affordability and housing market concerns. Private lending solutions are an excellent option in this area to finance renovations or get the money to stop a power of sale or foreclosure.
If you need private lending solutions, the Mortgage Broker Store can help with different products, including second mortgages.
Understanding Halton Hills and the Potential of Private Lending
Halton Hills was incorporated as a town in 1974. It's located about 45km west of Toronto. Along with the section of the Niagara escarpment, Halton Hills is known as one of the biggest agricultural spots in the GTA. Acton and Georgetown are the two bigger population centers, along with a number of smaller, more rural places.
These features and others make Halton Hills an excellent place to own a home. Private lenders can loan money for things like home improvements to increase property value. They base the application on equity and the Loan-to-Value (LTV) ratio. This is the ratio of the loan amount on the property to the market-appraised value of the same.
- LTV = Loan Amount/Appraised Value of the Property
A property might be worth $400,000, and a borrower wants a $300,000 loan. The formula works out to be 75%.
Tailored Private Lending Options For Halton Hills
Private mortgage lenders can customize mortgages far more than banks can. These lenders work with borrowers to understand their needs and write customized terms into the mortgage agreement. If the borrower meets the lender’s equity requirements, they can alter the term, amortization, payment schedule, and more.
The LTV is about the amount of equity a homeowner has. It's the first step in determining how much a Halton Hill resident can get in an alternative loan. Private lenders use equity, which is the part of a property that's paid off in mortgage-free, when they are looking at applications.
A proper home appraisal is critical. It gives homeowners in Halton Hills a good idea of the market value of their house. You'll need an appraisal from a qualified professional, and you should make sure that you list any renovations and repairs.
Choosing the Right Private Lending Solution
There are different types of people and groups that can offer private mortgages. These include individuals, small groups (known as syndicated) and Mortgage Investment Corporations (MICs). The larger groups and corporations generally have more support staff and better customer service. In contrast, individual lenders can work faster and give more personalized care to customers.
Private lenders offer different products like second mortgages and debt consolidation loans. These depend on the amount of equity a homeowner has and alternative income requirements like money from contract work. A good private lender will discuss your situation in order to best understand your needs. The lender, or a mortgage broker, can outline your options and recommend a product to fit the client’s needs.
Regulatory Considerations in Halton Hills
Both private lenders and the mortgage brokers who work with them must follow the Mortgage Brokerages, Lenders, and Administrators Act. The Financial Services Regulatory Authority of Ontario (FSRA) ensures mortgage brokers follow the Act.
No regulatory body directly regulates private mortgage lenders. However, they must become licensed mortgage brokers themselves or work with one.
FSRA offers several classes of licenses for brokers and mortgage agents. A level one license only allows for A-tier lender mortgages and bank mortgages.
The level two license allows one of these agents to offer A lender mortgages or private and alternative mortgage products. There's also a broker license that allows the licensee to run an entire brokerage and process all kinds of mortgages.
It's crucial to ensure you're working with a level two agent, at least when looking for alternative or private mortgage products.
Interest Rates and Lending Terms for the Halton Hills Market
Private lending solutions in Halton Hills most often have higher interest rates. This is because these alternative lenders take on a bigger risk with more flexible criteria, such as sole proprietor income.
As a general rule, borrowers can expect to see private mortgage rates that are around twice the current bank rates. For example, as of August 2024, most of these alternative lenders are offering rates between 8% and 12%.
Higher set-up fees are another feature. These generally run between 4% and 8% of the total mortgage amount when you factor in legal, broker, and lender fees. It's also important to remember that these private mortgages usually come in one-year terms with interest-only payments. They can be renewed at the end of these terms at the lender's discretion.
Are You Looking for Real Estate Professionals in Halton Hills?
Ron and Jonathan Alphonso are real estate professionals who offer private loans that can stop the power of sale and foreclosure. Big media outlets like the Toronto Star and Global News seek their expert opinions for stories.
Jonathan and Ron are responsible for maintaining mortgagebrokerstore.com and powerofsalesontario.ca. Reach either at 416-499-2122 or by email at [email protected].