Alternative Lending

Alternative lending, often termed B lending, distinguishes itself from private lending.

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It serves as a primary financing option for clients within the brokerage and has witnessed substantial growth annually, particularly as governmental qualifying guidelines become increasingly stringent.

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Many traditional or charter banks maintain an alternative lending division. These lenders typically mandate a minimum 20% down payment and cannot offer insured (high ratio) mortgages.

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Unlike traditional banks, alternative lenders employ distinct qualifying criteria, allowing for greater creativity in assessing applicants' income and creditworthiness. Commonly referred to as "common sense lenders," they exhibit a higher risk tolerance.

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Consequently, they levy higher interest rates on mortgages and impose lender fees, varying by lender and file.

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The alternative lending space typically features shorter terms, with borrowers opting for terms ranging from one to three years. Often, an alternative mortgage serves as a transitional tool for borrowers aiming to return to traditional banking.

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At our brokerage, alternative lender applications primarily involve clients with unique income sources or self-employed individuals, as well as applicants with compromised credit histories.

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For self-employed clients, alternative lending offers an appealing solution by adopting a holistic approach to income verification, placing significant emphasis on applicants' business earnings rather than solely relying on personal tax returns.