If you would like a quick overview, please watch the video that explains it all to you.
Why choose alternative mortgage lenders?
The B side of the mortgage business is known for being more flexible. As banks and big lenders have strict requirements for acceptance and proving a mortgage the B side of the business is a great alternative for those deals that just may not meet those stricter requirements.
While the conventional side of the business (A lenders) have predicted terms, conditions, terms and amortizations, the alternative side does as well however the rates can be somewhat higher than the large banks.
What types of alternative lending exist?
Private Mortgages: The funds come from a person or business - private money - the lending acceptance, conditions and fees are regulated by them.
B-Lender Mortgage: These are from the usual financial institutions but the borrowers are typically ones that don't fit on the A side of their business. B2B is an example of this. The bank has an A side of the business with certain approval criteria. If the borrowers aren't a fit, they have the B2B alternative area, which is more flexible, and the borrower has more opportunities to be accepted.
Credit unions: Financial institutions that are regulated at a provincial level. Because it has less variety of products the terms and acceptance can be more flexible with the advantage of having lower interest fees.
Monoline: Mono means one so this type of lender specializes in one type of lending; mortgages. They only deal with mortgage brokers and they offer the same protection as banks.
Smaller banks: With small banks there may be an opportunity to have more flexibility and more chances of approval than a larger bank. Their lending guidelines are slightly different from those of large institutions which makes the process easier to get approved with the same security.
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