Top Reasons for Choosing a Private Mortgage for Home Repairs
For several reasons, a private mortgage is an excellent solution for emergency home repairs. There are flexible approval criteria, and you can get the money soon. You’ll also be able to get the money based on your equity. Remember that’s the part of the property you own and is mortgage-free.
For years, MortgageBrokerStore.com has provided customized private mortgage solutions and advice for homeowners facing urgent repair needs.
Common Emergency Repairs
Canadians are no strangers to these kinds of repairs, considering the climate they live in. These are generally repairs that are required to make the home inhabitable or to prevent future severe damage.
Furnace Repairs
A furnace that breaks down in the middle of winter is at the top of the list for emergency home repairs. Many parts of these appliances can go wrong, including the pilot light and the ignition control, and when either one of these breaks down, a furnace won’t start. Even something like a broken thermostat can cause a furnace to shut down.
Roof Fixes
Ice dams on a roof are common in the Canadian winter. They form along the roof’s edge and prevent snow from falling off when it melts. Water can seep into a home under the shingles and cause an emergency problem.
Structural issues
People who live in areas prone to flooding need to be careful. Everything from melting snow to heavy rainfalls can cause shifts and cracks in a foundation. That can cause some expensive structural issues resulting from water damage and flooding.
These are just a few of the emergency home repair possibilities. Homeowners who suffer from these and others need the situation fixed quickly.
Importance of Quick and Flexible Financing Options
Your family’s safety is the number one reason for quick and flexible financing. A roof leak in a storm can cause more significant issues if it’s not fixed quickly. Mould can grow in the walls, and support beams can eventually rot away. Of course, keeping your family warm during December in Canada is the priority, so you need efficient, fast financing to fix a broken-down furnace.
Getting to emergency repairs quickly is essential for property values. The price of your house can drop if you don’t fix these issues quickly.
Private lenders are an excellent choice for homeowners looking for quick, flexible financing options for emergency repairs. They offer unique features like the following.
Quick Access to Funds
Private lenders have a quicker streamlined approval process than traditional banks and credit unions. Borrowers who look to private lenders need the money for different things, like covering expenses after being laid off from work or doing home renovations and repairs. Those are just a few situations where they can apply for quick access to funds.
A private lender’s process is faster partially because they focus on equity and the Loan-to-Value Ratio (LTV). This ratio measures the amount of the loans that are asked for to the appraised value of the property.
For example, if a property has a market value of $400,000 and a borrower needs a loan of $300,000, the LTV is 75%.
The formula looks like this:
LTV = Loan Amount / Appraised Value of the Property.
Banks generally have a more protracted process emphasizing a credit score, several years’ pay stubs, and verifiable income requirements.
Flexibility in Approval Criteria
A private loan for emergency home repairs will get you the money faster, but that’s not the only bonus to choosing these alternative lenders.
Private lenders are also more flexible than traditional banks and credit unions when it comes to acceptance criteria. They look at alternative sources of income, like money from sole proprietorships and contract work. Banks and more traditional lenders are stricter. They look for up to two years in the same job, a trail of pay stubs, and even employment letters.
Even though they are flexible, private mortgages are one-year loans with interest-only payments. The lender can choose to renew them at the end of each term.
Options for Borrowers with Poor Credit
An emergency home repair like a cracked foundation becomes even more critical for people with poor credit. Equifax pegs a poor credit score somewhere between 300 and 579. They suggest that people looking for a loan with those credit numbers should try to improve them before they get new credit through a bank.
That’s not the case with a private lender. The emphasis here is on equity and the LTV ratio rather than a credit score. Remember that equity is defined as the current market value of your property and how much you owe on any mortgages or loans.
Say Goodbye to Financial Worries with MortgageBrokerStore
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Our team is happy and proud to work in real estate in different areas across Ontario. If you call us, we will be more than glad to help you and provide free advice. If you are going through a power of sale situation, call us at 416-499-2122 or email us at ron@powerofsalesontario.ca.
