As a private mortgage lender in Ontario, there are a number of reasons why clients seek private mortgages.
Many Ontario homeowners have accumulated equity in their homes and they look for solutions to tap into this equity. An easy solution would be taking on a second mortgage.
As self-employment continues to grow in popularity, clients who run their own businesses are finding it increasingly difficult getting the necessary approvals from standard Canadian banks.
Some of these reasons include home renovations, putting a deposit on a new property, paying down debt or even paying for a child’s post-secondary education. For other clients, they seek second mortgages from private mortgage lenders in Ontario as they find themselves juggling too much high interest debt. This can lead to negative impacts on their credit scores, making it extremely hard to get banks to refinance their mortgages.
Here is an excellent example that explains how clients with bruised credit can leverage a second mortgage from a private mortgage lender in Ontario.
Tembo was recently approached by a client in the middle of the COVID pandemic interested in refinancing their mortgage. The end goal of this refinancing was to pay off high interest credit card debt and completing renovations in their basement.
Our client was unable to work to their full capacity as they were caring for elderly parents. As a professional in an industry that regularly meets with clients face to face, they were unwilling to put their parents in danger of transmitting the illness.
For a number of reasons their credit took a big hit and stood in the mid to high 500s so our team knew that no bank or B lender would approve their refinance at this time.
They reached out to Tembo Financial as they knew we could come up with a quick and creative solution to get them back on track! Sensitive to the difficulty they were going through, Tembo provided a second mortgage for enough funds to pay off all their debt and complete the renovation work they desired. Keeping in mind the cash flow concerns, Tembo included a prepayment reserve to reduce the amount of out-of-pocket expenses to the family.
Fast forward to today, with the loan approaching maturity, the clients credit score has substantially improved, well into the high 600s and carrying absolutely no debt except for their first mortgage and the second mortgage.
The mortgage provided by Tembo will now allow for the client to get refinancing with a bank.
This real-life example explains one of the many benefits of working with a private mortgage lender in Ontario and leveraging second mortgages to help navigate life’s many curveballs.