Alternative mortgages come in various forms and sizes to accommodate unique financial situations. Some of the most common types of alternative mortgages include:
Private mortgages are loans offered by private investors, not regulated by the government, and are available to high risk borrowers. They typically charge higher interest rates and fees and will look more at an applicant’s home equity rather than income or credit score.
Compared to private lenders, B-Lenders provide lower interest rates but have more stringent requirements. Generally, they specialize in CMHC-insured mortgages and require applicants to have a specific credit score and remain within certain debt service limits.
If you have your sights set on buying a new home but haven’t sold your existing property yet, bridge loans are an ideal solution for the down payment. This form of alternative financing enables you to receive enough money to cover the mortgage deposit while waiting for funds from selling your property.
If you’re 55 years or older and a Canadian citizen, you’ll experience the benefits of having a steady cash flow with a reverse mortgage. There’s no need for monthly payments or income verification – just receive your cash within days. It really couldn’t be simpler; all is left is for you to choose what you’ll do with it!
A construction loan offers you the perfect solution to finance a home that needs to be built from scratch. Some loans can be interest-only payments, while others come with flexible repayment schedules. When the term is up, you can extend the loan or roll it into a mortgage to free up more cash for you to use elsewhere.
You can borrow more money while already having an existing loan to obtain a second mortgage. The amount of money you can receive depends on your home’s equity; as your equity increases, so will the amount of money available for borrowing.
A self-employed mortgage can help you qualify for a larger loan than you would without one. Here, the lender will consider your self-employment or business income by adding an extra 15% (gross-up) or by including deductions in that number, increasing your chances of qualifying for a larger mortgage.
Vendor Take Back Mortgages
Vendor Take Back Mortgages (VTB) provide an innovative way for buyers to purchase a home, allowing them to bypass traditional mortgage lenders. By using these loans, sellers can lend money directly to buyers to buy their property.
Rent-to-Own allows renters to rent a home currently up for sale on the market. Throughout their lease, renters can accumulate money for their down payment, potentially boost their credit score, or take care of debts. In the end, they are given the option to purchase the home at a cost agreed in advance.