Seven Lending: Offering Alternative Mortgage Options in BC

VANCOUVER, BC, Aug. 18, 2021 /CNW Telbec/ - Based on the latest stress test update on June 21, 2021 it became even more difficult for Canadians to own their dream homes as it reduced their borrowing capacity for various situations. Since many Canadians can't get financing for their desired homes from banks, there has been an increase in the demand for alternate mortgages.

Further, with the historically low mortgage rates, there are some upcoming private mortgage brokerages offering low-rate private mortgages which can help Canadians who don't qualify with a Bank with their borrowing needs.

Why is it time to buy now?

With the interest rate being as low as they are, now is the time to buy before they start going back up. On July 14th, 2021, in their article named "The Pandemic Sprint Into Mortgages" TD bank said: "Homeowners with mortgages coming due in 2023 are likely to face a much less favorable interest rate environment with benchmark government bond yields close to more 'normal' levels". With this in mind, some people might not be eligible for a Bank mortgage but there are other solutions out there. One of the best solutions is to talk to a private lender to see what kind of options are available.

What are the rates of a private lender?

The rates are always evolving with the market, and it is important to stay up to date to get the best deal. For example, in the last couple of months, the rates at Seven Lending (A BC based Mortgage Brokerage specializing in private lending) were starting at 4.39% for 1st mortgages up to 50% of the home value, and around 5.99-6.50% up to 75% of the property value. 

As per Raghav Manchanda who a mortgage broker with Seven Lending which specializes in private lending:
"These are the lowest rates I have personally seen in the private lending industry. Till a few years ago we used to see big financial institutions charging clients 3-5% and for private lenders to come close to that gives our consumers so much choice and flexibility"

Such loans typically don't require any income verification. However, because these are private, they do have extra costs. There are usually fees charged by the lender & broker which is roughly 1-2% of the borrowed amount. In addition, there are legal costs, appraisal costs etc.

Who uses Private Mortgages in 2021?

As per Asim Ali, who is one of the leading mortgage brokers in the country, he has seen an increase in the number of private mortgages being done and clients looking for it. He told us in an interview:
"We are seeing an increased number of clients asking for Private mortgages. Fast turnaround times, low documentation requirements, and increased borrowing power seem to be some of the big reasons. In addition, clients who are self-employed, looking to build, or were affected with financial and life situations where a bank would say no to them regardless of their income are using private mortgages. We have had situations where a client's bank cancelled at the last minute and had to get a good private solution short term.'' 
Private mortgages are becoming a great second option to banks for a vast array of people looking to buy their home.

Why use Private Mortgage?

This is an upcoming option that will accommodate and help people that are not being approved by banks and more traditional channels. With low documentation, faster process and much more flexible guidelines, such companies can offer good interim solutions to clients.

SOURCE Seven Lending

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