Answer: Interest rates vary depending on the down payment, existing equity, mortgage position, property type, ability to verify and the application. Generally, the more you can provide the more options that are available. Land only, Modular Homes, and other non-conventional properties are also subject to higher interest rates.

A typical private lending first mortgage on a residential property of 50% LTV warrants an 8% – 9% annual yield from a private lender. A general rule of thumb is for every 10% the LTV increases the annual yield increases by 1%. The Annual Yield is a combination of the contract rate and lender fee for each year. Brokerage Fees are extra.

A typical private 2 mortgage on a residential property starts at a 12% – 14% annual yield rate regardless of the LTV and will increase as the LTV increases. A general rule of thumb is for every 5% the LTV increases over 65%, the annual yield increases by 2%. The Annual Yield is a combination of the contract rate and lender fee for each year. Brokerage Fees are extra.

Answer: Pre-payment penalties vary depending on the type of deal and the objective, but the common industry standard on closed mortgages is 3-months interest pre-payment, or a fixed percentage of original registered principal amount. Some provide open or partially open options. No pre-payment penalties will apply to a fully open mortgage.

Answer: Combined Brokerage & Lender Fees generally start at 4% of the gross mortgage on mortgages greater than $150,000. Combined Brokerage & Lender Fees generally start at 10% of the gross mortgage on mortgages less than $150,000.

As a property owner, it is your responsibility to put yourself in the best position possible to transition from private financing, but we also understand that life happens. When your maturity date is coming up, you will essentially have the following options:

1. Renew with your existing lender. Good Repayment history is required for the Lender to consider.
2. Refinance with a new private lender. All costs associated with securing a private mortgage will apply again.
3. Refinance with a non-private lender provided you qualify. Minimal costs are associated with this option.
4. List the property for sale and move.
5. List the property for sale to an investor and become a tenant with an agreement to buy-back in the future or be a permanent tenant. If the above options are not exercised, the lender can/may initiate power of sale foreclosure proceedings.

Answer: The options when property is lacking are few, but there are options. If the property is in an urban center or direct surrounding area and there is 10%-15% equity, the options would be as follows:

1. Provide some cash injection to meet a private lender’s criteria for the loan to value requirements.
2. If other property is owned where there is adequate equity, a blanket mortgage can be considered.
3. Sell your property. If the equity is less than 10%, the suggestion is to simply sell your home if you are in a foreclosure situation. (Refinance Situations)
4. Enter in to Lease Buyback program. This is when an investor purchases the property from the property owner. A separate agreement is also prepared by both parties with the intention of the home being purchased back at a pre-determined date. (Refinance Situations)

Answer: This is a “YES” and a “NO”. First and Foremost, looking for direct private lenders through various website and newspaper ads is time consuming. If a direct private lender is found, it is unlikely that they are regulated by their provincial body. Mortgage Brokerages are regulated. The best option for anyone in need of private money is to obtain the funds from parents, family, or friends that are in the position to assist you. This may not be available nor a desirable option.

Dealing with just any broker isn’t recommended either. Many mortgage professionals find private lendingto be foreign. The downside to this is that they may not be familiar enough with private lending to provide adequate service. In addition, some mortgage brokers are too proud and will not inform their customers that they are unable to effectively work your application; so, they will instead shop your application or refer to another brokerage that is comfortable working on your file. While doing this, as a customer you end up paying fees for multiple brokers and the lender. Not the wisest decision.

Amansad Financial does not your files to other brokers. Once we have everything required for your application, a summary is presented to our DLGN (Direct Lender Group Network) without providing your confidential information or property details. Direct Private Lenders will basically get your first name, the property type, property value, a general location, the LTV ratios, and some background information. Our partners generally confirm interest within 2 business days, but in many cases the same day. When LTV’s exceed 80%, we have secondary options with our MIC partners.

Answer: The process is relatively fast provided we are receiving requested documents in a timely fashion. On average, once an appraisal, application, and supporting documents are received, a commitment can be issues in 3 days or less, but in many cases within 24 hours.​

Answer: This is always a consideration. At times, there may not be enough equity in the primary property, so if you own other real estate with adequate equity, this will be considered. This is referred to a “blanket mortgage” or “Inter Alia” mortgage. This type of mortgage is not offered by traditional or semi-traditional lenders on residential real estate. It is only offered by private lending institutions and individual lenders.