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Explore the Benefits of the Private Mortgage Market

Whether negotiating the real estate market for the first time or revisiting it for an investment property, investors are more likely than not faced with having to secure a mortgage. For most investors, their automatic response is to go to the bank to try to access finances to help make their real estate or investment dreams come true. However, due to strict lending policies, unique personal financial situations amongst other situations, relying solely on the bank not only limits financial options, but may also result in the client paying too high a rate, or jeopardizing their credit rating due to multiple credit checks and applications. It is because of this that investing with the private mortgage market in the Great Toronto Area is not only beneficial for those looking to get into the real estate market for the first time but is also a sound financial decision for those looking to expand their portfolio through an investment property.

Growth within the GTA is on the rise. Population growth year over year is increasing within the Toronto and surrounding areas. It is because of this desirability of location that investors are looking to situate homes and businesses within the area. According to the Canada Mortgage and Housing Corporation (CMHC), home ownership has increased from just over 55% in the 1970s to approaching 70% in 2011 within the city of Toronto. Understandably, home values continue to increase, making this an attractive investment for those looking to get into the market. Additionally, as new communities are being developed within the GTA, research into the GTA transportation effect continues to favour investing in the market.

The impact of transportation improvements (both through infrastructure enhancements and transit developments) on the housing market further increases the desirability of the real estate market. Studies indicate that GTA transportation improvements will deliver a 10-20% enhancement of real estate values in the region of the improvements (Campbell et al). Furthermore, these properties will outperform the rest. In situations where real estate values may decrease, the properties affected by the transportation improvements will experience a decrease of 10-20% less. Improved accessibility through transportation improvements increases house values as ease of access to Central Business Districts increases and the linkage between the residential area and other areas of business and leisure increase. This all combines to increase the value of the house, making an investment in the market all the more desirable.

Given the attraction of the market, private lenders can ensure their clients are able to make the most of their financial decisions and make sure their needs and best interests are met. Benson Capital has access to over 30 lenders (including the bank) and therefore is able to negotiate the best rate on your behalf. By accessing the partnerships, relationships, and experience of a private lender, clients are protecting their credit score by avoiding multiple credit checks and applications. The private lender knows their client’s needs and financial goals and is able to use that information to secure the best rate through the best lender or investor for that particular client. Banking rules and proposed lending guidelines can make it prohibitive for clients to access money; requiring in depth documentation and identification, often restricting or outright disqualifying clients from obtaining necessary funds. Private lenders have access to investors and lenders who are waiting to finance the next project- making lending criteria much more flexible and accessible. 

The climate and the opportunity are right for investing in the real estate and mortgage markets! Visit our Facebook page at www.facebook.com/Benson-Capital or give us a call at 416.477.5530 to see how working with private lenders and investors can help take you financial goals to the next level! 

in Private Mortgage