If you applied for a mortgage and were declined by your bank, what would you do? Most homeowners aren’t aware of what we call ‘Alternative Lenders’. Everyone presumes that they qualify for the best-discounted rates and no lender fees because that was how the market used to work before all the changes to the mortgage rules in January 2017.

With all these changes, namely the stress test, there are a growing number of borrowers who need different types of mortgage solutions. I have been working with clients for many years in arranging financing in the secondary mortgage market, or the ‘B’ marketplace.

Possibly you own your own business, don’t declare enough income, are recently divorced or widowed or you have had credit problems in the past. I have a variety of lenders I use depending on each different scenario. One thing I would like to say that has changed over the past couple of years is DO NOT let your mortgage get into arrears, no lender wants to be chasing clients to make their mortgage payment on time.

It will most likely cost you a higher interest rate and there may be some fees charged to arrange the financing but sometimes the rates are as good as what your bank was offering.  More importantly, you can still get the funds you need to consolidate your debts, payout Revenue Canada, do home improvements, payout your ex or purchase an investment property.  There is a saying in the industry, ‘the higher the risk, the higher the rate’ and this is definitely true if you don’t show enough income or have had credit problems, you are classed as a higher risk.

While alternative lenders can provide a lifeline for Canadians who have run out of other financing options, it’s important to read the fine print.  i.e. on the extreme end, some alternative lenders have a full prepayment penalty when you want to pay out your mortgage or if you are 15 days late on your payment, they may start a power of sale on your home.

I have worked with many clients in the alternative mortgage market over the past 25 years. You need a professional who is experienced with these specialized products to ensure you are receiving the right alternative lender. I am working for you and will find you the best option!

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Mississauga, Burlington, Oakville and Toronto and offering all mortgage related services such as2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406