The term 'alternative lending' refers to any lending situations that are outside the traditional banking system.  Alternative lenders think outside the box and offer solutions to Canadians who would otherwise be turned away by traditional banking systems.

Negative Credit

Sometimes events in life prevent us from keeping up on all our commitments and payments, and can impact our credit in a very negative way.  Regardless of why your credit may be impacted, there are alternative lenders that focus more on the strength you have within your employment and income as well as the down payment or the equity you have to put forth into a new mortgage.

Even though rates can be a bit higher when dealing with an alternative lender, if you're stuck between being able to make a purchase or not, many people are thrilled with the options they are provided when taking this route.

If your credit is not in good standing, your goal should be to work towards improving your credit steadily, and aiming to get back into a typical mortgage as soon as you are able using the alternative lender to bridge the gap.

Self Employed

Running your own business will allow you to have several write-offs; which is ok for your tax assessment but not so good for your verifiable income.  Traditional banking systems will ask for your verifiable income where alternative lenders will be much more gracious and provide you with competitive options. 

Alternative lender rates are not that far off from an A lender. Alternative lenders are a common solution for many self-employed Canadians.  You may end up with a slightly higher interest rate but quite often you will save money through corporate structuring.

Non-Traditional Income

If you happen to earn extra income through a non-traditional avenue such as Airbnb, tips, skip the dishes, bonus commissions, or uber; then alternative lending will be much more flexible.  Traditional lenders will almost always want to see 2 years of income to consider your income on a mortgage application.  This is not always the case with alternative lenders, it’s all dependent on the overall strength of your financial situation.

Expanded Debt-Service Ratios

Stress tests reduce Canadians borrowing power significantly, there are many alternative lenders that allow you to use expanded debt-service ratios that allow you to qualify for a much higher amount.  A channel lender uses a strict GDS of 35/42 and TDS of 39/44 which is dependent on your credit score where alternative lenders are much more flexible.  The more money down, the more you can borrow and expand your debt-service ratios.

Contact us anytime to go over this further, your unique plan and strategy are one phone call away.