Getting approved for a traditional mortgage can be challenging when your financial situation doesn’t fit the standard lending criteria. Self-employed income, credit challenges, a recent financial setback or other circumstances can make qualifying through a traditional bank more difficult.
That doesn’t necessarily mean you have no options. Alternative mortgages in BC can provide financing solutions for borrowers who may not qualify through conventional lenders.
What Is an Alternative Mortgage?
An alternative mortgage is designed for borrowers who don’t meet the requirements of traditional “A-lender” financing. Alternative lenders can take a broader look at your financial situation rather than relying on the same criteria used by major banks.
Depending on the lender and your circumstances, alternative mortgage options may be available through B lenders, trust companies, credit unions or private lenders.
The right option depends on your income, credit history, down payment, property and overall financial situation.
Who May Benefit From an Alternative Mortgage?
Alternative financing may be worth exploring if you’ve had difficulty qualifying through your bank.
Potential borrowers can include:
Self-employed individuals with non-traditional income
Business owners with complex income structures
Borrowers with less-than-perfect credit
People who have experienced a recent financial setback
Buyers with unusual or non-standard financial circumstances
Homeowners who need short-term financing
Borrowers who don’t meet a traditional lender’s qualification guidelines
Self-employed Canadians, in particular, can face challenges when their taxable income doesn’t fully reflect their business cash flow. Some alternative lenders have programs designed to consider different forms of income documentation.
Can You Get a Mortgage With Bad Credit?
Having a lower credit score can make qualifying for a traditional mortgage more difficult, but it doesn’t automatically mean you can’t obtain mortgage financing.
Alternative lenders may consider the overall strength of your application, including your property, equity, income and financial circumstances.
However, alternative financing can come with higher interest rates and fees than conventional mortgage products. It’s important to understand the total cost and terms before committing to any mortgage.
Alternative Mortgages for Self-Employed Borrowers
Being self-employed shouldn’t automatically prevent you from buying a home or refinancing your existing mortgage.
If your income comes from a business, contract work or other non-traditional sources, documenting your income can sometimes be more complicated than it is for someone receiving a regular T4.
A mortgage broker in Kelowna can review your financial situation and help determine which lenders may be appropriate for your circumstances.
Is an Alternative Mortgage a Long-Term Solution?
An alternative mortgage doesn’t necessarily have to be your permanent financing solution.
For some borrowers, alternative financing can provide an opportunity to address a temporary financial challenge while working toward qualifying for traditional financing in the future.
Improving your credit, reducing debt, strengthening your income documentation and building additional equity may help improve your financing options over time.
Before choosing an alternative mortgage, it’s important to understand the interest rate, lender fees, penalties, term and potential exit strategy.
Why Work With a Mortgage Broker?
Finding the right mortgage can be complicated when your financial circumstances don’t fit traditional lending guidelines. A mortgage broker can help you understand the available options and determine which type of lender may best fit your situation.
At Rampone-Marsh Mortgages, we help clients throughout Kelowna and the Okanagan explore mortgage solutions based on their individual circumstances. From alternative mortgages and refinancing to mortgage renewals and home purchases, we can help you understand your options.
Explore Your Mortgage Options
A traditional bank saying “no” doesn’t necessarily mean you have reached the end of your mortgage options. Alternative financing may provide a solution when conventional lending doesn’t fit your situation.
If you’re self-employed, dealing with credit challenges or having difficulty qualifying for a traditional mortgage, contact Rampone-Marsh Mortgages or call 250 801 8834 today. Our experienced Kelowna mortgage brokers can help you explore alternative mortgage options and find a financing solution that fits your circumstances.
