Hard Money Lenders in Canada are mostly private investors. A hard money loan is a specific type of asset-based mortgage financing through which a Canadian Real Estate Investors receives money secured by the value of Canadian real estate investment property.
Hard Money Lenders Canada
Hard Money Lenders in Canada loans are typically issued by Canadian private investors for investment properties but they will consider others based upon numbers and circumstances. Canadian Real Estate investors can find more Canadian Real Estate Hard money Lenders at Professional Real Estate Investors Group (PREIG) Canada
Interest rates for Hard Money Lenders in Canada loans are typically higher than conventional commercial or residential Canadian mortgage rates because of the higher risk taken by the Canadian hard money lender. Most Canadian hard money loans are used for short term basis. Hard Money Lenders in Canada money is similar to a bridge loan, which usually has similar criteria for lending as well as cost to the Canadian Real Estate investors.
Hard Money Lenders in Canada loans often refers to not only an asset-based loan with a high interest rate, but possibly a distressed financial situation, such as arrears on the existing mortgage, Canada Revenue agency lien, judgments, and property taxes or where the bankruptcy, auction and foreclosure proceedings are in the process.
Credit scores, income, assets and other conventional lending criteria may be analyzed by a Canadian hard money lender. However, most Canadian hard money lenders primarily qualify a loan amount based on the value of the Canadian real estate being collateralized. Typically, the biggest loan one can expect would be between 50% and 66% of the Canadian property value. That is, if the property is worth $100,000, the lender would advance $50,000 – $66,000 against it.
This low LTV (loan to value) provides added security for the Canadian hard money lender in case the borrower does not pay and they have to foreclose or do power of sale on the property. Canadian Hard money lenders will require Accredited Appraiser Canadian Institute (AACI) appraisal. Canadian Real Estate investors who have taken Canadian Real Estate investment training seminar apprenticeship by World Wealth Builders will have least difficulty obtaining Canadian hard money loans since they understand the system very well.
Canadian Hard Money Lending Rates
Canadian hard Money Mortgage loans are generally more expensive than traditional mortgages. However all Canadian mortgages are not necessarily considered to be a high cost mortgage. Generally a Canadian hard money loan carries additional risk that the Canadian Real Estate lender and investors are aware of. Canadian hard money lenders are generally only willing to create hard money loans in return for a very high interest rate (often about 18% plus ten points for residential home purchases). Some Canadian hard money lenders will do Joint ventures with you depending upon your approach.
Interest rate on Canadian hard money
The rate is not dependent on the Bank Rate. It is instead more dependent on the Canadian real estate market and availability of hard money credit. As of 2008 and for the past decade hard money has ranged from the mid 18%–24% range. Some conditions will apply based upon the property, experience and risk involve.
Cross collateralizing a Canadian hard money loan
In some cases, the low loan-to-values do not facilitate a loan sufficient to pay off the existing mortgage lender, in order for the hard money lender to be the first mortgage place. Because a security interest in the property is the basis of making a hard money loan, the Canadian hard money lender usually always requires first mortgage position of the property.
As an alternative to a potential shortage of equity beneath the minimum lender Loan to Value guidelines, many Canadian hard money lender programs will allow a “Cross Lien” on another of the Canadian Real Estate investor’s properties. The cross collateralization of more than one property on a hard money loan transaction, is also referred to as a “blanket mortgage”. Not all Canadian Real Estate investors have additional property to cross collateralize.
Canadian Hard Money Loan structure
A hard money loan is a species of real estate loan collateralized against the quick-sale value of the property for which the loan is made. Most lenders fund in the first mortgage position, meaning that in the event of a default they are the first creditor to receive remuneration.
Hard money lenders structure loans based on a percentage of the quick-sale value of the subject property. This is called the loan-to-value or LTV ratio and typically hovers between 60 and 70% of the market value of the property. For the purpose of determining an LTV, the word “value” is defined as “today’s purchase price.” This is the amount a lender could reasonably expect to realize from the sale of the property in the event that the loan defaults and the property must be sold in a one- to four-month time frame. This value differs from a market value appraisal, which assumes an arms-length transaction in which neither buyer nor seller is acting under duress.
Best source of Canadian Hard Money Lenders
The best source of finding Canadian hard money lenders is Professional Real Estate Investors Group (PREIG) Canada. There are approximately 10,000 Canadian Real Estate investors who have various investing criteria. If you area paid member then the process is much faster.
Following is the link to their website
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