Alternative Lenders, also referred to as Alt A banks or “B” lenders are no longer just a trend. If you don’t meet the big banks lending criteria, an Alt A Lender might just be the right fit for you!
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Alternative Mortgage Lenders are most often referred to as “B” Lenders. And, they are no longer just a trend. For instance, take a look at any newspaper or tv advertisement and you’ll realize that people are looking to alternative mortgage lending to get help.
There was once a time when most homeowners had great credit and a steady source of income. However, this is rarely the case in times like these. In fact, if you have less than perfect credit or can’t prove your income you are statistically the new norm. By the same token, if you own real estate and have a residential mortgage, chances are money is tight.
If you fit into this category, you can all but forget about approval from one of Canada’s big banks. Again, if you aren’t the perfect candidate from a credit and income perspective, you have almost no chance of getting approved by a big bank.
Fortunately, to help fill the void of the big banks, alternative mortgage lenders have stepped up. Also, these types of lenders tend to approve deals on a common-sense basis. Consequently, they generally look at how much equity you have and care less about bad credit history or income.
For the most part, B mortgage lenders will offer all of the same products that traditional big banks do. Most alternative lenders in Ontario and other Canadian Provinces will offer:
Additionally, alternative lenders offer a variety of products and they are also more flexible than the bank. For example, many of these lenders will entertain:
Notably, the biggest difference between an A Lender and a B Lender is the criteria they look for. Big banks want to see perfect credit and stable, verifiable income. In contrast, B Lenders place a lot more emphasis on how much equity you have and underwrite their approvals using more common sense.
Alternative mortgage lenders are not governed the same way big banks are. Therefore, they can make exceptions and do so often.
As a rule, B lender rates in Canada are moderately higher. However, mortgage rates are only negligibly higher and these lenders are far more flexible than the bank. In particular, most Alternative lenders will overlook most poor credit scores and be lenient with qualifying income.
The new mortgage rules as laid out by the federal government have forced big bank mortgage lenders to reduce amortizations and cut back the size of mortgage loans. Thus, the new mortgage rules also make it harder for self-employed borrowers and limit the percentage a client can refinance their home too.
This has made “B” Lenders very attractive to clients and homeowners are flocking to experienced mortgage brokers to arrange financing through these lenders.
While having a list of alternative mortgage lenders in Ontario or any other province for that matter might seem helpful, it would likely give you a headache to try to sort through it.
Subsequently, hiring a mortgage broker to help you navigate your options is always in your best interest. Equally important, a mortgage broker who specializes in alternative lending will help you find the best B lenders to fit your situation.
Turnedaway.ca has been dealing with alternative mortgage lenders since the concept evolved. Besides being a namesake for alternative lenders, we understand the products they offer. And we have established long-standing relationships that allow us to negotiate the best interest rates and flexible terms for our clients.
Finally, if you have been turned away from a traditional lending institution because you don’t fit in their “cookie-cutter” mold, let us show you how we can help. Call us today at 1-855-668-3074 or apply online and let us show you what 30 years of experience can do for you.
We can’t thank you enough for all your help with our mortgage. We were skeptical about filling out an online application but we had tried several banks and due to our credit, couldn’t find anyone to help us. Getting a call within 15 minutes of submitting our application to go over the application put my mind at ease but my husband and I were both shocked to receive a call the same day with an approval. We are still amazed at everything you did considering how difficult the banks made our situation sound. Again, from the bottom of our hearts thank you so much!
Marilyn & Bob T, Whitby Ontario