Alternative Mortgage Solutions in the GTA, Toronto and across Ontario
Alternative Mortgage Lenders are most often referred to as “B” Lenders. For instance, take a look at any GTA newspaper or tv ad and you’ll realize that people are looking to alternative mortgage lending more and more to get the mortgage and financing they need.
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. As well, if you own real estate in the GTA or in Ontario and have a residential mortgage, chances are money is tight.
If you fit into this category, chances are the Big Banks in Canada will give you a hard time and might decline your mortgage approval. Again, if you aren’t the perfect candidate from a credit and income perspective, you have almost no chance of getting approved with a big bank, that's just how the system is setup.
Fortunately, alternative mortgage lenders have stepped up to fill this gap in the mortgage marketplace. GTA Alternative lenders tend to approve deals on a common-sense basis. We work with them to help describe your unique situation and needs. These lenders generally look at how much equity you have, and care less about bad credit history or income.
What Types of Loans Do B Mortgage Lenders Offer?
For the most part, B mortgage lenders in the GTA (Alternative Mortgage Lenders) will offer all of the same products that traditional big banks do. Most alternative lenders in Ontario will offer:
- 1st Mortgages
- Home Equity Loans
- Home Equity Lines of Credit (HELOC)
- 2nd Mortgages
- Mortgage Refinance & Debt Consolidation
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:
- Poor or Bad Credit Mortgages
- Interest only mortgages
- 100% rental offset mortgages
- Stated Income Mortgages
- Property Tax Loan Mortgages
- CRA Debt Consolidation Mortgages
“A” Lenders vs “B” Lenders – What's the Difference?
The biggest difference between an A Lender and a B Lender is the criteria they look for. The Traditional Big Banks in Canada 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.
GTA 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 somewhat higher. That said, mortgage rates are only negligibly higher and these lenders are far more flexible than the bank. Many Alternative lenders will overlook most poor credit scores and be lenient with qualifying income.
The new mortgage rules as laid out by the Canadian government have forced big bank mortgage lenders to reduce amortizations and cut back the size of mortgage loans. Therefore, the new mortgage rules also make it harder for self-employed borrowers and limits the percentage a client can refinance their home to.
This has made “B” Lenders very attractive to clients and homeowners are coming in droves to experienced GTA mortgage brokers to arrange financing through these lenders.
Our GTA Mortgage team has been dealing with alternative mortgage lenders since the concept first started. We fully 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.