B lending/Alternative Lending:

When considering alternative lenders, also known as “B” lenders, it is generally understood that the mortgage application is challenged.  The alternative lending space has really changed during the past few years.  As federal and provincial lending legislation is becoming increasingly restrictive, B-lenders are stepping up to fill the gaps left by BIG BANKS despite themselves.

Traditionally,  B-Lenders would basically specialize in helping Canadians to have weak credit, are self-employed, and have more than 20% equity or down payment.

Things are now changing on account of the tighter lending criteria.

The types of borrowers who do not fit inside the box of traditional banks or credit unions have increased to be sure.

Typical Client Profiles For B/altenrative Lenders:

– High-value property $1,000,000 +
– Properties to be held in company/corporate names
– 2nd mortgage products HELOC & Credit Card.
– Bad credit
– Self-employed borrowers without a 2-year history in business or low-claimed income
– Previous bankruptcy or consumer proposal
– Can use mortgage proceeds to payout bankruptcy or consumer proposal early.
– Commissioned Sales People

B-lenders provide short-term lending solutions, usually 1-3 year terms.  Fees are typically 1%-3% of the total mortgage amount.  Also, mortgage rates tend to be a little higher, usually 1%-2% compared to Banks or Credit Unions.

If you would like to see if B/alternative lending is right for you, please contact us today!

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