Understanding Of Alternative Mortgages
In the past, your mortgage options were likely limited to whatever your local bank was willing to offer you. But today’s marketplace offers a refreshing array of options. Whether you’re ready to start shopping for your first home or you’re looking to refinance the family homestead, alternative lenders deserve a serious look as you start the mortgage shopping process. As an expert in the field, Mortgage With Vadim has written down how alternative mortgages work and how they can benefit you.
Who is an alternative mortgage lender?
Simply put, an alternative mortgage lender is any lender outside of a traditional bank. They are sometimes called sub-prime B lenders or B lenders. Alternative mortgage lenders can give you mortgage options that are not available from traditional banks, including a quicker mortgage application process, unique loan terms, or completing the mortgage application process online.
Alternative mortgage lenders use different criteria for their clients, which makes them easier to qualify for the loan. On the other hand, a conventional lender (the big banks) will need a verified income and a good credit score even to accept the application. By contrast, alternative mortgage lenders are much more relaxed when processing your mortgage application, instead focusing on the amount of equity you possess. Alternative mortgage lenders use factors other than income and credit score to underwrite the proposal.
Benefits of alternative mortgages
Both sub-prime B lenders or B lenders usually offer similar loan packages. In Ontario, in particular, as well as some other provinces across Canada, examples of loan packages on offer include home equity loans, home equity lines of credit, first mortgages, second mortgages, and mortgage refinance debt consolidation. However, alternative mortgage lenders also offer products (usually more flexible) that conventional lenders do not, including interest-only mortgages, CRA debt consolidation mortgages, mortgages for poor or bad credit owners, stated income mortgages, 100% rental offset mortgages, and property tax mortgages.
The downside to alternative mortgages
Unfortunately, it’s not all sunshine and rainbows when it comes to alternative lending. In exchange for speed and comparatively high approval rates, borrowers often face high-interest rates. This additional interest income helps them to cover their losses on the riskier loans in case of default.
Takeaway
So, what are your options? Typically, alternative mortgage lenders would be a good option if you have credit problems or an employment history unsuitable for more traditional banks. Plus, today’s marketplace is loaded with lenders from which to choose and brokers who can help you navigate the arena and find the best mortgage for you.
With over ten years of experience in the mortgage and real estate industry, my reputation and long-standing experience allow me to negotiate great rates and access limited-time mortgage specials. As a mortgage professional, I will stay with you for the life of your mortgage with advice and opportunities.
I offer services such as home purchase mortgage, refinance mortgage, debt consolidation, first-time home buyers, and mortgage renewal to clients across Vaughan, Toronto, Richmond Hill, Markham, Newmarket, Mississauga, Milton, Oakville, Burlington, North York, Etobicoke, Kleinburg, Scarborough, East York, North Toronto, GTA, and the surrounding areas.
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If you are looking for a mortgage broker in Vaughan, ON, call me on my toll-free number at (416) 894-5315 or send me an email at mostovoyvadim@gmail.com. To learn more about the services I offer, please click here. To get in touch with me, please click here.