If you are considering purchasing a new home or refinance in Sault Ste Marie, chances are, you will not find a better time than now.
Home prices in the city have seen a massive 85.8% decrease from 2021 to 2022, measured between April 11 and May 9. This makes Sault Ste Marie a much better option compared to nearby cities like Sudbury, which saw a 42.4% increase in home prices, or Brampton, which had an 18.6% increase from 2021 to 2022. The average property price is even higher in Vaughan, where homes are selling at an average price of $1.4 million as of May 2022.
With the average price for sold homes in Sault Ste Marie between April 11 and May 9 coming in at $145,000, it’s quite tempting to consider buying a home there.
However, if you have a bad credit score, this might complicate things for you. Unless you have the cash to buy the property, you’ll need a mortgage, which is not easy to get with bad credit. A private mortgage is a good option to consider in this case.
What Is a Private Mortgage?
A private mortgage is a loan that is offered by either individuals or institutions for people who want to buy a home but have bad credit. Most people in Sault Ste Marie or the rest of Canada will require a mortgage to buy a new property, but bad financial health can always complicate that for you. This is where private mortgages come in. These short-term loans are offered by private entities or individuals, so they’re not as unwavering with their criteria as banks and other lenders.
For private mortgage lenders, this is an investment, so they’re not strict when it comes to credit history or background checks.
This is convenient if you have bad credit or an irregular source of income. Private mortgages usually last between six months and three years, and they carry a higher interest rate than ordinary mortgages or loans from banks. On the plus side, you can take advantage of interest-only payments and applying for private loans is much easier and financing approvals are significantly faster than banks.
What Do I Need to Get a Private Mortgage in Sault Ste Marie?
For most private mortgages, you’ll need proof of income so the lender knows that you can make your payments on time. If you’re self-employed, most banks would hesitate to give you a loan, but private lenders are more flexible and may just ask you to provide additional documents.
Income aside, you’ll also need to put a down payment of at least 25%, which is much higher than what’s usual if you have a good credit score and are applying for a normal mortgage loan. If you have other property that you’ve sold to cash or ordinary buyers, you can use that money for the down payment and if there’s any left, use it to improve your credit score.
Where Can I Find a Private Lender?
Depending on where you want to purchase your new house, condo, or second home, you should look for lenders working in that area that can cover your mortgage. A good private lender should cover most of the city if not more, and whether you want a house in Broadview Gardens or a second home in Bayview, the lender should have no problems giving you the loan.
Even if you want to buy the property in smaller towns near Sault Ste Marie like Hayden, Garden River or Island Lake, you can still qualify for a mortgage from a private lender. One way you can find a private lender is by going online and searching for ‘private mortgage lenders Sault Ste Marie’ or ‘private mortgage lenders Ontario’. You can also find them through mortgage broker.
When you do find private lenders, explore your lending options and ask them about all their experience in Ontario’s real estate market as well as their professional credentials before making your decision so you can be confident you’re doing business with a reliable individual or company.
What Can I Do to Improve my Credit Score?
The first thing that you need to do is actually commit to working on your credit score. It’s not impossible to go back from having bad credit, but you just need to work on paying your bills on time and avoid missing or making late payments. Moreover, before you do any of that, you should review your credit report to make sure there aren’t any errors in it –– almost a third of credit reports contain errors.
Private Mortgage Lenders in Sault Ste Marie
Do your homework about the companies you’re considering dealing with so you can be confident they can help you. If you want to learn more about private mortgages in Sault Ste Marie, call Mortgage Broker Store at 416-499-2122 or check out our website for a free financial consulation.
We have been offering private loans across Ontario for decades, and with our personalised advice, we can help you find a custom solution for your needs.