Private Mortgage Lenders Alberta – Private And Bad Credit Mortgage Loans
What is a Mortgage? By definition; “A loan that you take out in order to buy property. The collateral is the property itself.” However, the word mortgage alone, in everyday usage, is most often used to mean mortgage loan.
There are many ways to structure a mortgage to meet your needs. Most people associate Mortgage Loan with the purchase or refinance of a property. It is the single largest purchase for most people, and also the many times the largest liability. Mortgage Loans however can be used for a variety of reasons that Alberta Private Mortgage Lenders can assist with.
Some of the above are interchangeable or related in one sense or another. For example, private mortgage lenders are often required in all the above mentioned when the borrower does not meet bank criteria. A Private mortgage loan can be obtained At the same time. Land Acquisitions in Alberta are sometimes associated with commercial mortgage loan. Having access to a wide variety of Private Lenders for Home Mortgages and contacts provides the ability to find a solution.
Private Mortgage Lenders Alberta Assist With:
- Equity Take Out Mortgages
- Debt Consolidation Loans
- CRA Tax Arrears
- Judgments, WRITs, and Liens
- Foreclosure Assistance Mortgage Loan
- Land Acquisition
- Land Development Mortgage Loans
- Commercial Mortgage Loans
- Home Renovations
- And so much more
What to Consider When Applying For a Private Mortgage in Alberta
There are 4 factors that influence the marketability & fundability of a loan application: the term, the rate of interest, the ratio of loan to value (LTV) and the location.
When Applying for a private mortgage, a lender wants a short term and a generous yield and interest rate. Private Lenders generally do not want to exceed 12 months, but at times will sometimes provide a longer term on exception. In many cases, private lenders will set up loans over 12 months with an option to renew with a good payment history and agreeable market conditions. Most lenders will have renewal fees attached.
The right rate of interest combined with the right LTV, lenders will snap up the mortgage like hot cakes; making it much easier for Mortgage Investment Corporations (MICS) to satisfy their investor partners. Because these are first position loans, that is a particularly attractive yield given the fact that BOC interest rates are so low right now.
Because the ratio of the loan (LTV) is so important, a professional appraisal of the property is crucial. There are 2 ways to address this. One way is to go to your trusted realtor and request a Comparative Market Analysis (CMA). Another more reliable assessment is to obtain an appraisal. You may want to obtain an appraisal or CMA in advance to get an idea what your property is worth, but just know that Private Lenders will generally require their own approved appraiser to complete an assessment.
Private Lenders focus much on location. For example, a 50% LTV in a major city is more attractive than a 50% LTV property in a rural location. The equity position may be the same, but the likelihood of selling a property in the event of an unforeseen default in an urban center is much higher simply due to the population density. Alberta Private Lenders must always consider the worst case scenario because the loans provided are higher risk. Borrowers have the right intention, but things happen; so if a lender is no longer interested in carrying the loan at maturity, the lender wants to know that you can either refinance with a new private lender that’s willing to give you another chance or sell the property. The primary objective for a Private Lender is to ensure their investment in you for the property is not at risk.
Refinancing with a Bad Credit in Alberta
If you have hit roadblock after roadblock when trying to refinance with a Bad Credit; it’s very likely going to the wrong places. I’m sorry to say, but many banks have a “Love and Hate” relationship with their customers. When you are paying on time and everything in your life is going well, they Love You. When things have taken a turn for the worst, they don’t like you so much. In fact, some feel that the years of harmony are long gone. Banking is a business, and no mater how “nice” your loan officer has been over the years they only have so much pull. Ultimately, we are all an “Account Number”. If your credit has taken a bruising, refinancing may be possible provided you have more than 25% equity in your urban property (35% or greater on a rural property). If you don’t have enough equity, but own other real estate, there are creative ways to put the financing together by way of a bad credit blanket mortgage loan. In some cases, the Private Mortgages will have no payments for 6 months and up to a year. These types of loans cannot be arranged by Banks. In most cases, with sufficient equity, we can either provide you a solution or point you in the right direction.
Purchasing with a Bad Credit In Alberta
If you are wondering how to get a mortgage with bad credit in Alberta, there is good news. First off, many people purchase homes each year with the help of mortgage loans from banks and other traditional sources. Generally, those traditional lenders like to have a down payment ranging between 5 and 20 percent, and they like borrowers to have at least a good credit score, as well as a verifiable income stream that has been in place for some time. There are some people, though, who have more than the minimum down payment saved up in the bank, but they have gone through some financial difficulties in the past that have caused some damage to their credit score. This means that they cannot secure financing through a bank, even though they have a 20 or even 30 percent down payment saved up. Amansad Financial offers several ways that we can help people secure a bad credit mortgage in Alberta.
Bad Credit Mortgage Lenders in Alberta
The way we help people gain access to financing in spite of bad credit in Alberta is through our direct group private lenders and industry partners. These are individuals and companies who have money to invest but don’t want to throw it down on the roulette wheel of stocks or commodities investments. On the other hand, they don’t want the pennies in income that normally come from savings accounts, certificates of deposit and other investment vehicles that banks and similar institutions offer. Private lenders can earn a higher rate of interest than a savings account by lending money to people who can afford a mortgage but have poor credit. They view this as a more secure form of investment, because people are only going to default on mortgages as a last resort. Even when times get tough, they will cut out all of their other expenditures first, so dining out, that expensive cable television package, and even other payments like car notes and credit card bills will be overlooked first. Because private mortgages will carry a higher rate of interest than available terms with a mortgage from a bank or other traditional lender, the private lender makes a nice sum on his investment, while you get access to a home that you wouldn’t have otherwise.
Poor Credit Mortgage Lenders Alberta Here’s how the process works. If you need a bad credit mortgage in Alberta, get in touch with Amansad Financial right away if you have at least 20 or 30 percent down saved up. We do have private mortgage strategies in place for 10% down. We have a list of investors who are looking to put their money into a private loan, either their RRSP funds or other funds that have been saved away. When a borrower comes to us looking for funds with bad credit, we look through our list of lenders who are looking to invest. We use the amount that you are looking for, in addition to the profile of your property, to match you with what lenders are looking for.
Why is the property important? Since you’re putting more than 25% percent down, and since the term of a private loan is generally shorter than what you can work out with a traditional source, a private lender looks at the property itself. If you can keep your LTV ratio (loan to value) at 70 percent or less (in an urban center), and if the lender agrees with your assessment of the property’s value, you are likely to get the loan.
Let’s go back to that shorter term, though. A private lender generally wants all of his money back between one to three years with some exceptions. This doesn’t mean that you have to pay for the whole balance yourself, though. It does mean that you have some time to get your finances in order and secure a loan from another source before the private loan expires. This could mean getting your credit score up high enough so that a traditional lender will work with you. It could mean getting a co-signer that can help you transition sooner.
Give Amansad Financial a call if you are looking for a private mortgage or bad credit mortgage in Alberta. We have helped many borrowers and we look forward to working with you as well!
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Amansad Financial Services | 2nd Floor, 5303 91st, Edmonton, AB T6E 6E2