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Private Lenders in the Kingston Real Estate Market

Last Updated on April 1, 2021 by YGK News Staff

Kingston is a city rich with history and alive with culture. Offering unparalleled beauty, the city is situated on the Eastern end of Lake Ontario, the mouth of the St Lawrence River, and also on the most southerly end of the world-renowned Rideau Canal. Kingston’s lifestyle remains a huge draw for many and has been named the most walkable and cyclable city in the Province. With a population of around 123,798, the city continues to grow at a rate of 0.56% per year.

Kingston is the Home of Canada’s first Prime Minister, Sir John A. Macdonald, Canada’s oldest University Queens University and nicknamed the “Limestone City” due to the impressive number of heritage buildings constructed from beautiful limestone materials. 

With energy fueled by a robust tourist industry and student presence, the real estate market has benefited from such an attractive place to visit and live. Despite the ongoing pandemic and dire real estate predictions at the outset of the pandemic, Kingston experienced a record year in 2020 in terms of house sales and increases in the price of the average home in the Kingston area. 

The president of the Kingston and Area Real Estate Association declared that 2020 represented the best year in real estate Kingston has experienced in over 10 years. With a remarkable 4, 118 homes sold during 2020 representing an increase of 9% over home sales in 2019, the Kingston housing sector thrived, contrary to pandemic-fueled expectations. In the final month of 2020 alone, the average house price increased by 18.8% to $504,712 from December 2019.

Why do people need private lender mortgages?

Many Kingston homeowners would like to benefit from such a healthy housing sector. Some, however, despite the booming real estate numbers may have felt the economic pinch to household finances as job losses or reduced hours become commonplace throughout the last year. Some may have damaged credit as a result and have been turned down by the banks when applying for mortgage financing.

Overall combined debt per person in Ontario according to the Fraser Institute is $64,224 which represents the second-highest debt ratio in the country, only slightly behind Newfoundland & Labrador at $64,224. Statistics Canada has recently reported that Canadian households owed an average of $1.77 for every dollar of disposable income and the household debt service ratio increased 13.22% by the end of 2020.

If banks, credit unions, or trust companies have turned down Kingston homeowners for mortgage financing, there is a wide network of private lenders in Kingston throughout the Province and in the area that will be able to offer various types of private mortgage loans for any number of purposes. 

Generally, some of the reasons why Kingston based homeowners may choose to approach a private lender include mortgage financing to buy a rental or investment property, provide funds for home improvements, help pay off household debt, help pay principal mortgage payments or additional mortgage funds to pay off arrears if facing mortgage default. Private mortgage loans are available to address financial concerns when the approval criteria imposed by other big lenders are unable to be met. 

If a Kingston homeowner is self-employed or relies on contract work then it will be difficult to obtain mortgage financing from a bank that prefers traditional forms of income. Any negative marks on a credit report provided from either of Canada’s credit reporting agencies,  Equifax or Transunion will also make bank mortgage financing very difficult if not impossible.

Type of mortgages offered by private lenders

Just as the banks can offer several mortgage loan options for Kingston homeowners who meet the necessary criteria, private lenders can offer a wide range of private mortgage loan financing. Private lenders will be able to offer mortgage loans for those Kingston homeowners who are to:

  • Obtain consolidation loan to pay off high-interest consumer household debt.
  • Take out a home renovation loan to pay for upgrades and much-needed renovations to increase the overall value of the property for resale purposes.
    Take out a Second Mortgage to pay for immediate expenses and pay off mortgage arrears if behind in the mortgage payments or help pay for monthly principal mortgage payments.
    Take out a home equity loan utilizing existing equity to help pay for upcoming expenses or pay off pressing debts.
  • Take out a Home Equity Line of Credit to use as a rolling line of credit using house equity that will cover needed expenses moving forward.
  • Refinance the terms of the principal mortgage loan to allow monthly payments to be made more easily.

Criteria for private lending approval

When approaching a bank, Kingston homeowners will be facing stringent mortgage stress tests that are often difficult to pass. Banks will be requiring applicants to prove near-perfect credit scores, easily demonstrated yearly full-time salaries, considerable assets, and untarnished credit histories.  A private lender will rely less on credit and include other approval criteria. When approaching a private lender you will need to provide:

  • A list of additional assets that you may have besides your primary residence.
  • Paperwork proving all sources of monthly income including investments income, contract income, self-employed income sources, and child/spousal support monthly income.
  • A recent appraisal on your property. Your lender will be assessing the Loan-to-Value (LTV) on your property in addition to the percentage of equity built up in your property. Generally, private lenders will be looking for 25% equity in your property and will loan up to 75% LTV ( which represents 75% of the appraised value of your property). Interest rates charged by private lenders will generally range from 7% to 12% with fees associated with private loans generally between 3% to 6% of the total cost of the loan.  

Private lenders will rely heavily on the appraised value of your home as any additional private mortgage will be leveraged against your home. 

Mortgage Broker Store will be able to help guide you in private loan options

At Mortgage Broker Store we are well versed in the private loan options available in Ontario and the availability of private lenders with access to a wide network of private lenders in the Kingston area and throughout the Province. 

When credit problems have prevented you from reaching your mortgage goals, we will be able to sit down with you and discuss relevant options open to you and direct you to private lenders in your area to obtain mortgage financing. Use the equity in your home to secure a private mortgage loan to pay for immediate financial concerns and to profit from such a healthy Kingston housing market.


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