A bank just turned down your application. You need cash on hand fast. You're wondering if another option exists.
Fortunately, getting liquid funds is still possible. In this article, you'll learn why banks turn down certain files and how to unlock funds another way, without waiting for weeks or dealing with a long approval process.
Why Banks Turn Down Your Application
Banks follow strict rules. They calculate a precise debt ratio. If your declared income is too low, the file gets turned down.
Self-employed workers often run into this. Their income looks low on paper, even if their property is worth a lot. Traditional lenders don't always look at that value first, which can be frustrating for people who have built real equity over the years.
Here's a concrete example: a self-employed worker earning between $50,000 and $70,000 a year. If they own a duplex with a lot of equity, their application could be turned down because of their declared income. A private lender, on the other hand, looks first at the value of the duplex
A change in circumstances can also work against you. A temporary job loss or accumulated debt can be enough. The criteria stay the same, no matter your history.
At Clic Hypothèque, the evaluation is based on common sense. There's no debt ratio to meet. The loan is based on the net value of your property.
You get a response within 24 hours or less. The notary can finalize the signing in as little as 7 days. You get your cash on hand quickly, without the usual bank delays.
Two key elements for accessing liquid funds fast:
- The net value of your property, rather than your declared income.
- A file reviewed case by case, all across Quebec.
Even more remote regions are considered. Unlike some competitors, every file is reviewed individually.
Several situations lead people toward this type of solution. Paying off tax debts or credit card debt is the most common case. A single monthly payment then replaces several separate debts.
Investors with several properties also look for this kind of financing. A file with seven or ten properties is often complex for a bank. Calculating each property's income takes time, sometimes several months, which discourages many experienced investors from even trying.
This type of financing also helps in other cases:
- Taking advantage of a quick buying opportunity, with a down payment of 20 to 25%.
- Renovating a property before selling or refinancing it.
The real estate market moves fast in Quebec. Properties between $450,000 and $650,000 are now getting five to ten offers. Having funds ready often makes the difference.
Some homeowners also use this financing for a bridge loan. This happens when a property is sold before another one is purchased. The loan gives you the time needed to complete the transaction.
Builders putting up buildings with 6 to 24 units also use this type of financing. They turn to private financing during construction. Once the building is finished and rented, they often refinance with a bank.
In many cases, the interest and notary fees on this type of loan are tax-deductible. This depends on your personal situation and how the loan is used. It's recommended that you check this with an accountant before applying, since every file is different.
Every situation is different depending on your needs. That's why each file needs to be reviewed case by case. A flexible approach makes all the difference, no matter where in Quebec you live, what your job looks like, or what your income looks like on paper.
Frequently Asked Questions
Why do banks turn down certain files?
They apply a strict debt ratio based on your declared income.
How can I get cash on hand quickly?
You get a response within 24 hours or less, with signing at the notary within 7 days.
Does this type of loan work all across Quebec?
Yes. Every file is reviewed case by case, even in more remote regions.
How long does it take to get a response?
You get a response within 24 hours or less, and the notary can sign in as little as 7 days.
Clic Hypothèque's Services
Clic Hypothèque offers private mortgage financing all across Quebec, case by case, when banks say no. To learn more about similar situations, check out our article on the best time to sell your home and our article on credit scores.
To better understand how a private mortgage loan works in Quebec, consult the Autorité des marchés financiers, the official regulator of the financial sector.
Need liquid funds quickly? Contact the Clic Hypothèque team today to discuss it, with no obligation.
