Alternative / B-Lender Mortgages

“Alternative” or “B lender” describes a part of the mortgage market rather than one legal or regulatory category. These lenders may consider income, credit or other situations outside standard prime-lender criteria. Institutions, products and oversight vary. We should identify the actual lender, costs, conditions and exit options before deciding whether a product suits you.

Examples include self-employed borrowers with non-traditional income, clients with recent credit issues, higher debt ratios, unique properties or temporary qualification challenges. The purpose is often to solve a specific issue with a plan to move to lower-cost financing later.

They are generally higher than prime-lender rates because the lender is accepting a different risk profile. There may also be lender or brokerage fees depending on the product and file.

It varies by lender, property, location and borrower profile, but alternative lending commonly requires more equity than an insured prime mortgage. I confirm the requirement after reviewing the full application.

Often that is the strategy. If income, credit or debt ratios improve, you may be able to refinance or switch at a future maturity, subject to qualification at that time.