Andrew Young from Community Mortgage Movement here. What’s the deal with A & B Lenders and Private Mortgages?
Today we are going to be going over what is an A Lender, B Lender and a Private Mortgage. But first here is a little more info on what mortgage agents and mortgage brokers do. I myself am a mortgage broker and can not only deliver a lot of different options and a lot of choices because we deal with different types of lenders. So, what’s the deal with these lenders?
Also known as traditional lenders, refer to banks or credit unions that traditionally cater to customers with good credit scores and have a reliable income – These are considered “A” Clientele.
Institutions servicing an “A” clientele include Canada’s major banks — e.g., BMO, CIBC, National Bank of Canada, Scotiabank, RBC, and TD. These banks are subject to federal regulation, which means that you’ll be stress tested when you apply for a mortgage.
These institutions offer a lower barrier of entry to qualifying for their products but can offset that with higher interest rates. In short, they cater to people who may not qualify for say, a mortgage or a credit card at one of Canada’s six big banks, because they lack either a strong credit history, or a guaranteed income (recent immigrants, or the self employed, for instance).
These are the lenders that can help fill the gaps between the A & B lenders. These lenders are not just for people in a really bad financial situation, it could also be for people who are looking to build something that is a little more unique, as the banks might not understand or the banks don’t have the hunger for.