List of Alternative Mortgage Lenders Canada

Alternative Mortgage Lenders in Canada

There are currently over 4 million residential mortgages in Canada, with millions of residents paying off their homes in different ways.

The way you finance your mortgage might not be the same as your neighbor. For obvious reasons, it all depends on your job, income, and credit score. Many people seek financing help because they can’t easily secure mortgages.

But are there financing options other than those offered by big banks?

Luckily, there is. Alternative mortgage lenders provide helpful solutions to those who get rejected by traditional banks. In this guide, we’ll be looking at why you may need an alternative mortgage lender. We will also cover how to find the best ones.

What Are Alternative Mortgage Lenders?

Alternative mortgage lenders are also known as B lenders or sub-prime B lenders. They’re all organizations that offer financial loans despite not being banks themselves.

Their services and loans are different than traditional banks. These services include more diverse loan terms, a faster mortgage application process, and the ability to apply for mortgages on the internet.

Alternative mortgage lenders often help those with bad or nonexistent credit. B lenders are usually the best option for those that are rejected by traditional banks.

The Popularity of Alternative Mortgage Lenders

A few changes to the federal mortgage system in Canada limited the size of mortgage loans for traditional banks.

The percentage a client can refinance their home is now limited. This is putting extra pressure on certain clients, like self-employed workers.

The way alternative mortgage lenders are governed is a bit different. That way, B lenders provide more diverse lending options.

For this reason, Alternative mortgage lenders have become very popular in the last decade. While their rates are higher than most regular banks, mortgage rates see very little difference and are flexible.

Difference Between Alternative lending and Regular Mortgage Lenders

But what are the differences between alternative and standard mortgage lenders or banks?

Clients are assessed differrently by different lenders. Regular lenders, like a traditional bank, look at clients’ income and past credit history.

Alternative mortgage lenders still look at those things, but with a different lens. B lenders don’t have the same mortgage stress test that the big banks do.

In fact, most alternative lending is based on the real estate itself. Ultimately the more equity you have, the easier it is to get approved.  Likewise, the larger your down payment is, the more likely you are to be approved with an alternative lender.

What Are the Benefits of Working With Alternative Mortgage Lenders?

What exactly are you getting out of alternative mortgage lenders? Are there immediate benefits? Let’s take a look at a few here.

Getting Loans

Traditional banks can be inflexible with their loan terms. Because of their job or credit score, some clients won’t be able to get a good loan no matter what they do.

Mortgage brokers who specialize in alternative lending can open up a variety of options. Regardless of the financial challenges, you face as a borrower.  B lenders are more flexible with their terms and find what works for each member.

Funding Loans

Bigger banks usually don’t focus on small loans and they often complicate the funding process. Alternative mortgage lenders are more helpful with small loans and provide greater flexibility with mortgage payment options. Again, the weight of these approvals is based on the amount of equity you have, not your income or credit.

Approval Times

Alternative mortgage lenders work much faster than regular banks. Traditional banks often have bureaucracy and red tape that prevents quick approvals. B lenders do away with that almost entirely and make the process smooth and quick.

Why You May Need an Alternative Mortgage Lender

With all that in mind, there’s a chance you’re still unsure about contacting alternative mortgage lenders in Canada. Let’s flesh out some of the reasons why people use B lenders and see if they align with your needs.

Credit Score

How well you manage your credit factors into the mortgage application process. It shows whether you have credit, if you’ve ever missed payments, and what your current balance is.

Banks use credit scores for deciding whether or not you can take out a loan. If your credit score is low or doesn’t exist, you have a poor chance of getting a mortgage.

Alternative mortgage lenders are far more lenient on this. They look at other factors to assess their decision on whether or not to approve a client.

Interest Rate

Alternative lenders do have moderately higher interest rates than the bank. But, they are still very competitive and certainly better than most types of unsecured debt homeowners carry.  above all, it really doesn’t matter what rate the big banks are offering if you don’t qualify with them.  The bottom line is that there is no point in cutting off your nose to spite your face.

To clarify, work with an experienced mortgage broker who can get you the best rate YOU qualify for.  Every homeowner’s circumstances are different. Working with a mortgage broker who specializes in alternative lending can make all the difference. Moreover, their job is to secure the best rates and terms you qualify for.

When dealing in high-ratio mortgage financing, Canada Mortgage and Housing Corporation requires a 680 credit score to be insured. If you have 20% down or are looking to refinance your mortgage with an alternative lender there is a lot more flexibility.

Income Source

You often need two years of tax returns or clear-cut financial statements to get a mortgage with traditional banks. Self-employed workers may find it difficult to get all the documents ready.

Those who work retail or other commission related jobs struggle with this as well. Because their income fluctuates, banks won’t give them mortgages as easily.

Alternative mortgage lenders are more lenient with your income situation.  Moreover, they can cater their services to make sure you get a loan regardless of your job.

List of Alternative Mortgage Lenders in Canada

We’ve outlined why you should consider alternative mortgage lenders in Canada. Let’s take a closer look at the ways borrowers can approach alternative lenders.

Certainly, any homeowner could do a little research. It’s easy to find a few alternative lenders on the internet, given today’s access to the world wide web.  However, there are more effective means of getting approved for a mortgage.

Therefore, not only is it ineffective, it is hardly what one would call cost-efficient.  For one, many alternative lenders aren’t open to the public and the only way to access them is through a mortgage broker.

Subsequently, a mortgage broker will be far more effective at shopping your application around. Mortgage brokers have the ability to submit their client’s application to their entire network, rather than just one or two lenders.

Finally, a mortgage broker is the best choice for finding an alternative mortgage lender in Canada for your situation.  A good mortgage broker will help guide you through the process each step of the way, making your life a lot easier.

Alternative Mortgage Lenders Today

Banks aren’t always going to fit everyone’s needs, and alternative mortgage lenders provide a convenient alternative. Let the team at walk you through the process and get you the approval you deserve.  You can contact us for a toll-free consultation at 1-855-668-3074 or apply online and have approval in as little as 24hrs.