Private Mortgage Lenders VS “B” Lenders. How to get Approved for a Mortgage in Canada when the Bank says NO!

Buying a house is one of the biggest decisions you’ll ever make. It’s exciting, nerve-wracking, and can be downright confusing. One of the biggest challenges you’ll face is figuring out how to pay for it all. Unless you’re one of the lucky few who can pay for a house outright, you’re going to need a mortgage. And that’s where private mortgage lenders and “B” lenders come into play.

What is the Difference Between a Private Mortgage Lender and a “B” Lender?

Now, you might be thinking, “what the heck is a private mortgage lender?” Well, my friend, let me tell you. Private mortgage lenders are individuals or companies who loan money to people who might not be able to get a mortgage through a traditional bank or credit union. These lenders are typically not regulated in the same way as banks, which means they can often provide more flexible terms and conditions.

On the other hand, “B” lenders are a bit more conventional. They’re still not the big banks, but they do operate within the same regulatory framework. “B” lenders are often used by people who might not qualify for a traditional mortgage, but who don’t want to go the private lender route.

So, which one is right for you?

Well, it depends on your situation. If you have a poor credit score, a high debt-to-income ratio, or some other factor that makes it difficult for you to get a mortgage through a traditional bank, a private mortgage lender might be your best bet. They’re often willing to take on riskier borrowers, but that risk comes with a price. Private lenders often charge higher interest rates and fees than traditional lenders.

On the other hand, if you’re not quite as risky, but you’re still not a slam dunk for a traditional mortgage, a “B” lender might be a better choice. They’re still regulated and they still follow certain rules, but they’re often more flexible than big banks. They can often provide loans with lower credit scores or higher debt-to-income ratios than a traditional lender would.

So, if you’re in Edmonton, Calgary, or anywhere else in Alberta and you’re thinking about buying a house, don’t be afraid to explore your options. Private mortgage lenders and “B” lenders might not be as well-known as the big banks, but they can be a great option for people who need a little extra help getting into their dream home. Just make sure you do your research, compare rates, and read the fine print before you sign on the dotted line.

So you’re looking for a mortgage, but you’re not exactly the kind of borrower that traditional lenders like banks and credit unions are falling over themselves to lend to. Don’t worry, you’re not alone. This is where “B” lenders and private lenders come into the picture. But which one is right for you? Let’s weigh up the pros and cons.

“B” Lenders – The Pros

More Flexible

“B” lenders are often more flexible in their lending requirements than traditional banks. They may be willing to overlook a lower credit score, or a higher debt-to-income ratio, which can make a big difference if you’re struggling to get approved elsewhere.

Lower Rates than Private Lenders

While “B” lenders may not be able to offer you the same low rates that traditional banks can, their rates are usually lower than what you’d get with a private lender. This means you can still get a mortgage without paying through the nose in interest.

Opportunity to Improve your Credit

If you’re able to make your payments on time and pay off your “B” lender mortgage, this can help improve your credit score. This will put you in a better position to qualify for a traditional mortgage in the future.

“B” Lenders – The Cons

Higher Interest Rates than Traditional Lenders

While “B” lenders may have lower rates than private lenders, their rates are still higher than what you’d get with a traditional lender. This can mean higher monthly payments, which may not be sustainable in the long run.

More Fees

“B” lenders often charge more fees than traditional lenders. These fees can add up quickly, and may make it more difficult for you to make your payments.

Less Regulation

While “B” lenders are still regulated, they’re not subject to the same strict rules and regulations that traditional banks are. This can make them riskier to deal with.

Private Lenders – The Pros

More Flexibility

Private lenders are often even more flexible than “B” lenders. They may be willing to overlook credit score or debt-to-income ratio entirely, and focus on other factors like the value of the property you’re buying.

Faster Approval Process

Because private lenders don’t have to deal with the same regulations as banks, they can often approve your mortgage application much faster than a traditional lender would.

Opportunity to Improve your Credit

Just like with a “B” lender mortgage, if you make your payments on time with a private lender, this can help improve your credit score.

Private Lenders – The Cons

Very High Interest Rates

Private lenders charge higher interest rates than any other kind of lender. This is because they’re taking on more risk by lending to borrowers who may not qualify for a traditional mortgage.

Shorter Loan Terms

Private lenders usually only offer loans with terms of one to three years. This means you’ll have to renew your mortgage frequently, which can be stressful and may mean you end up paying more in interest over the long term.

More Risk

Because private lenders are not subject to the same regulations as banks, there’s more risk involved in dealing with them. You need to do your research and make sure you’re dealing with a reputable lender.

So there you have it. “B” lenders and private lenders both have their pros and cons. Whether you choose one or the other (or neither!) will depend on your unique situation. Make sure you shop around, read the fine print, and get advice from a financial advisor before you sign on the dotted line. Good luck!

So you’ve decided to go with a “B” lender or a private lender for your mortgage. Great choice! But wait, there’s more to it than just picking a lender and signing on the dotted line. This is where a good mortgage broker comes in.

Here are all the reasons why you need a good mortgage broker if you’re getting a private mortgage or going with a “B” lender

They know the Lenders

Mortgage brokers have relationships with a wide variety of lenders, including “B” lenders and private lenders. They can help match you with a lender that suits your specific needs and situation.

They can Negotiate on your Behalf

Because mortgage brokers deal with lenders all the time, they have a good sense of what kind of deals are possible. They can negotiate on your behalf to get you the best rate and terms.

They can explain the fine print

Mortgages can be complicated, especially when dealing with alternative lenders. A good mortgage broker can help explain the fine print to you so you know exactly what you’re getting into.

They can save you time

Searching for a lender on your own can be time-consuming and stressful. A mortgage broker can save you time by doing the legwork for you, and presenting you with options that suit your needs.

They can help you understand your credit

If you’re dealing with a “B” lender or a private lender, your credit score may not be as important as other factors. A good mortgage broker can help you understand how your credit score will impact your mortgage application.

They can offer advice

Mortgage brokers are experts in the field, and can offer advice on everything from the best lenders to work with, to the best type of mortgage for your situation.

They can help you with the paperwork

Applying for a mortgage can be paperwork-heavy. A good mortgage broker can help you navigate the paperwork and make sure everything is filled out correctly.

They can help you save money

By negotiating on your behalf and finding you the best rates and terms, a good mortgage broker can help you save money over the long term.

Conclusion

In short, a good mortgage broker can be an invaluable resource when getting a private mortgage or going with a “B” lender. They can save you time, money, and stress, and make the whole process much smoother. So don’t hesitate to reach out to a mortgage broker when you’re ready to take the next step. Your wallet (and your sanity) will thank you!