I don’t know anyone who wouldn’t want to save money where and when they can. We clip coupons, sign up for store memberships, watch for sales and who doesn’t take advantage of Black
Alternative Lenders
Dated: November 3 2022
Views: 82
According to the 2022 CMHC Residential Mortgage Industry Report, Canada's six major banks (RBC, BMO, TD, CIBC, Scotiabank & National Bank) accounted for just over 73% of all mortgages in Canada. Is it any surprise then that this is where most Canadians go when looking for mortgage financing. However, these A-Lenders are also very strict in their lending requirements and therefore, not an option for all potential homeowners.
There are several reasons why a bank might decline someone for a mortgage. High debt level, low credit score or an unstable source of income, chief amongst them. Being declined for a mortgage by a major bank, however, shouldn't prevent you from buying a home if you can comfortably afford the mortgage payments.
This is where alternative mortgage lenders come in. These include private, monoline and B-Lenders as well as credit unions and smaller banks. They have less strict mortgage eligibility criteria and are more flexible in their policies. For example, non-bank mortgage lenders are not required to conduct a mortgage stress test. They will accept borrowers with lower credit scores or higher debt service ratios. Additionally, they can factor in non-traditional income sources, such as rental, foreign or self-employment income, when considering the borrower's ability to pay.
These flexible eligibility requirements typically come with higher interest rates and less favourable terms and conditions, which is why alternate lenders are often short-term options until the borrower can qualify for a conventional mortgage with an A-Lender.
The takeaway is that there are a variety of routes to homeownership in Canada depending on your life situation and understanding the pros and cons of the product you're applying for is key!
Cheryl Donnelly
CHERYLI’m proud to have spent almost 3 decades in the Real Estate industry and to have helped hundreds of people sell their current properties and find their dream homes. My career is a culminat....
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Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS® System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.
Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS® System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.
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The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by CREA and identify the quality of
Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS® System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.