Subprime bad credit mortgageThe Most Subprime Mortgage Options in Edmonton

The main factor in getting declined for a mortgage is a poor credit bureau; a score that is too low. Unfortunately unless you understand the reasoning behind the poor credit score, (which many bankers don’t) you cannot fix the problem. In many cases the issue is a very short term one which can be fixed quite quickly. When you work with one of our mortgage brokers, we will coach you on how to get your credit score up and get you pre-approved in no time. If your credit issues are not a quick fix, one of our subprime mortgages may be the answer.

We work with several non-conforming lenders who offer sub-prime mortgage products (B Mortgages). These lenders do not insure their loans through CMHC, Genworth or Canada Guaranty. Although these loans are more expensive (bank rates or higher), they are a great option for those who may not qualify otherwise. These loans are not as easy to qualify for as private loan options, however they are priced significantly better.

Subprime Mortgages are Not Just For Clients With Poor Credit

Subprime mortgage options in Edmonton are generally just outside the qualification box; the banks guidelines. Again, usually it comes down to poor credit issues, however it can also be tough to prove income, employment issues or even debt servicing that is too high. These options do not make sense for everyone, however let us show you the benefits. By comparing them to your other options, you can decide whether the added cost makes sense for you. We also refinance clients into  non-prime when their situation has gotten difficult to manage. This is not a great long term solution but it can be a great short term fix. A great rate means nothing if you can’t afford your monthly payments.

Surprisingly, the average credit score of someone in a subprime loan is 680. This is not far off what it is on an A side of the business. The reason for this is all the self employed clients who can’t qualify on for a prime mortgage; it’s much easier to do on the B side. If you are tired of paying someone else’s mortgage, apply for a free pre-approval.  We will work for you to find the right mortgage that will get you into the market sooner!

B Mortgages Will Become Much More Common Moving Forward

With the new mortgage rules coming in, more and more clients will  be turned down by their banks. Clients get turned down by the banks for marginal transgressions relating to credit or hard to prove income. Now however, there will be stress tests thrown into the mix, meaning clients will qualify for less home then they would like to buy. Qualification in general, has just gotten more difficult over the past number of years, and these ‘B’ mortgages are a common sense solution to an industry that does not utilize a lot of common sense.

If you don’t fit into the stringent lending guidelines of a prime lender, this does not mean that you are a high risk borrower. B lenders recognize this and offer reasonable options based on the the issues that may be affecting your application. It is also important to remember you will not always be in a subprime mortgage, it may simply be a short term fix to your situation, a band aid of sorts. Once you know what your issues are, it’s much easier to solve them.

Subprime Mortgage Rates in Alberta

Subprime mortgage rates in Alberta are not priced the same way as our best mortgage rates. These deals are priced by the lenders on a individual basis, depending on the overall quality of the deal. There are usually less options as well, with the terms often limited to 1,3 and 5 years.

For a rough estimation however of what you might expect to pay with a B mortgage, please see the posted mortgage rate table to the right. Posted rates are usually a good guideline assuming the lender does not surcharge or discount the rate too much. If credit is week, income is tough to prove, or the property is not in an ideal location you may pay a bit more in terms  of rate for your mortgage. The fact is, you will pay more in interest with a non conforming loan, but the short term pain for long term gain of getting into a your new home sooner will hopefully offset the costs.

Talk to us today about our options on the non conforming side of the business to see if one of these loans may make sense for you and your situation here in Alberta. There are no costs for our services, and it certainly doesn’t hurt to consider all of your options when purchasing a new home.


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