Most of the time, the problem for some home buyers to qualify for a conventional mortgage may be bad credit history, low credit scores, lack of credit history (new immigrants), self employed that can not "prove" their income, not having enough down payment or starting a new in a job, for example.

Getting a mortgage through a private lender is not only costly, as they charge very high interest, but also dangerous. Some of these “Private Lenders” ask for outrageous fees that have to be paid upfront by the buyer.  The interest rates may also change periodically at the lenders option and not based on the Bank of Canada rates. Penalties for pre-payment can be high as well.

We just watched W5 this weekend about a gentleman who supposed to be a private lender. He acted behind corporations that he created to lend private money and asking for huge fees upfront to release the funds.

Once the fees were paid by home buyers those mortgages and loans were never given to the Buyers, he kept the fees that had been paid. He kept stealing the money of innocent home buyers for years opening and closing new companies to avoid getting caught.

Our advice is that if you have to go with a private lender please do your homework and research who the lender is, get some references and analyse the conditions of your mortgage before agreeing to anything.

For more information regarding the Barrie Real Estate Market please call Peter or Patricia Clarke at 705-716-7611 or go to our website at www.BarrieProperties.com.