Financing Plan with a Private Lender: How It Works

You're looking to put together a solid financing plan before buying or refinancing your property. Finding the right partner can seem complicated. You're wondering where to start.

Fortunately, a private lender can simplify the process. In this article, you'll learn how this type of partner works and how they can help you.

Understanding the Financing Behind Your Project

A financing plan is how you structure your financing. This includes the amount borrowed, the terms, and the partner you choose. A good plan protects your ability to make payments.

Clic Hypothèque works differently than a bank. 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. Your declared income matters less than your equity. This is an advantage for many homeowners.

This refusal often happens after a change in circumstances. A temporary job loss or accumulated debt can be enough. The bank applies strict rules, even if your home has value.

How Your File Gets Evaluated

At Clic Hypothèque, you get a response within 24 hours or less. The notary can finalize the signing in as little as 7 days. This fast turnaround makes things easier.

The lender mainly looks at the value of your property. Every file is reviewed case by case, all across Quebec. Even more remote regions are considered.

Two key elements of a good plan:

• •The amount borrowed, based on the net value of your property.
• •The repayment terms offered by the partner you choose.

A self-employed worker with low declared income often benefits from this. Their home has value, even if their income looks low on paper. The private partner looks at the whole picture, not just what's on a pay stub.

Here's a concrete example: a construction contractor earning between $60,000 and $80,000 a year. If they own a condo with a lot of equity, some private lenders might charge higher fees or take longer to respond than others. Comparing a few partners before signing often means better terms overall.

Why Choosing the Right Partner Changes Everything

A private loan can also be used to pay off tax debts or credit card debt. A single monthly payment then replaces several separate debts. This simplifies your entire plan.

Investors with several properties also look for this kind of solution. A file with seven or ten properties is often complex for a bank. Calculating the income from each property takes time, sometimes several months.

A good private partner also helps you:

• •Take advantage of a quick buying opportunity, with a down payment of 20 to 25%.
• •Renovate your 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. Fast financing often makes the difference between winning or losing an opportunity.

Some homeowners also use this type of financing for a bridge loan. This happens when a property is sold before another one is purchased. The private partner 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. It's recommended that you check this with an accountant.

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're located.

Frequently Asked Questions

What makes a good financing plan?

It's the structure of your loan: amount, terms, and chosen partner, adapted to your situation.

How does a private lender evaluate my file?

They look at the value of your property rather than your declared income.

How long does it take to get a response?

You'll get a response within 24 hours or less, with signing at the notary within 7 days.

Does this type of financing work all across Quebec?

Yes. Every file is reviewed case by case, even in more remote regions.

Clic Hypothèque's Services

Clic Hypothèque acts as a private lender all across Quebec, case by case. To better understand your financing plan, check out our article on mortgage penalties 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.

Want to put together your financing with a reliable partner? Contact the Clic Hypothèque team today to discuss it, with no obligation.