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Finding the perfect place to call home and settling in can be fun!

Buying your first home is a really big step. And it’s probably going to be the biggest purchase you ever make. While looking for a home is exciting, in this tight real estate market, it’s important to know what kind of mortgage you qualify for before you start the hunt. If you fall in love with a house, chances are someone else has, too. If you aren’t pre-approved for a mortgage, you could lose your dream home to someone who already is.

Understanding the financial side of getting a mortgage can be overwhelming and daunting. There are a lot of things that need to be figured out: how much you qualify for, interest rates, mortgage term (15 years, 20 years, 25 years), payment plans (weekly, bi-weekly, monthly), whether you want a variable or fixed mortgage, and the list goes on.

It can be hard for first-time home buyers to know where to start. After all, a lot of different factors go into determining what kind of mortgage you qualify for. It depends on your income, debt, and credit history. By shopping around and asking questions, you could end up saving yourself tens of thousands of dollars over the term of your mortgage.

Do you go to a bank to get your mortgage? If you do, are you getting the best interest rate? Are the terms and conditions best suited to your economic situation and lifestyle? Or are the banks just going to push their own products and services?

Better yet, do you use a mortgage brokerage like Canadalend.com, whose independent, licensed agents draw from all available mortgage products and provide you with impartial advice?

For the most part, all first-time home buyers want the same things—to maximize what they can borrow, to minimize their interest charges, and to pay off their mortgage as quickly as possible. When it comes to getting your first mortgage, the real difference comes in service and communication.

If you want to find out what kind of house you can afford; compare mortgage terms, rates, and amounts; or figure out how to save thousands by increasing your monthly mortgage payment, try Canadalend.com’s wide variety of interactive financial calculators.

Canadalend.com’s professional agents love working with first-time home buyers, helping them get the mortgage best suited to meet their financial needs and getting them into their dream home.

Canadalend.com’s licensed agents make it easy for first-time buyers to choose the right mortgage. Whether you need a big or small, fixed or variable mortgage, Canadalend.com agents work with all the major banks and lending institutions to get you approved in 24 hours.

A Canadalend.com agent is more than just the perfect resource for first-time buyers looking to get an approved mortgage fast! Your Canadalend.com agent can continue to be a great support, helping answer your questions and providing you with advice or referrals. At Canadalend.com, our goal is to help you achieve your short- and long-term financial goals.

What should first-time buyers look for when it comes to getting a mortgage? The nearest independent, licensed Canadalend.com agent!

Within Canada, for a variety of reasons, citizens are taking full advantage of second mortgages. Whether combining credit cards, paying for home repairs, or buying property, funds from a second mortgage improve a borrower`s situation.

The key question for many borrowers is, of course, who will lend me the money? A hundred, or even fifty, years ago the potential answers to that question were few. Banks had the majority of the loans with credit unions holding a small share of the lending business.

In 2020, there are three categorizations of lenders. The A-lenders are the traditional lending institutions, banks and credit unions. Next are the B-lenders, who despite their B status, often offer a service on a par with the A-class. B-lenders account for a smaller share of the market but can offer better rates and have a lower threshold for entry. They can work with borrowers rejected by the A-class.

Finally, there are private lenders who specialize in bespoke lending arrangements which may carry more risk. These loans can be highly specialized and are used when a different kind of thinking is needed.

Credit Unions

Credit Unions are formed by people pooling their money. They buy shares in the union and the money they use is put in a collective pool. This pool is then used to create loans with an emphasis on “people helping people.” The union is owned and operated by the people that buy shares. As such, credit unions enjoy tax-exempt status and operate on a not-for-profit model. Their loans can be structured in a way that a bank’s loan cannot.

One of the biggest changes to Canadian mortgaging in the last ten years has been stress testing. Stress tests are designed to make sure that people getting a mortgage can afford it. As a side effect, it also keeps people who could afford a mortgage, from getting one. Increasingly, credit unions have been filling that gap with loans that do not need stress testing.

B-Class Lenders

Often B-Class lenders are viewed as exactly that, B-Class. There are certainly some lenders that behave badly in both classes. Not being a bank doesn’t immediately mean a B-Class lender isn’t a good choice.

B-Class lenders are many different kinds of companies. Sometimes they can be businesses that are looking to loan money. They can be private groups operating in a similar way to a credit union. They might also be smaller financial companies specializing in loans and nothing else.

What these companies all have in common is a desire to lend money. As they are not financial institutions, they do not have to meet the same criteria as banks do. They can offer second mortgages without the need to stress test for example. B-Class lenders compete with the A-Class by offering a high standard of service to more borrowers than the A-Class can.

When you work with a B-Class lender you can expect a slightly higher interest rate on your loan as they do work with slightly riskier investments. Shopping around can help you find a good product with the right rates. It’s even possible to find rates that are equal to or lower than those offered by banks. Getting the best interest rate, fixed or variable, can save you tens of thousands of dollars on your loan.

Finding Solutions

Those who wish to borrow, face many choices. They could connect with one of the many Canadian credit unions. They may be best suited to working with one of the many B-Class lenders. Working out what’s going to be best, short and long term, can be tough.

Canadalend.com’s financial experts give you clear independent advice. This is because they are exactly that, independent. Unlike at a bank they’re not incentivized to sell you unsuitable financial products. Instead, they can find the lender and product that’s going to best serve your needs.

Get started by contacting Canadalend.com today to discuss your needs so that we can find the right lender for you.

In Canada, two credit bureaus are responsible for calculating credit scores. Equifax and TransUnion issue scores between 300 and 900 as a way for lenders to assess borrowers. As a general rule, 650+ is what a lender likes to see from a potential borrower. Anything below 600 is a concern for lenders and may limit a borrower’s options.

Credit scores are a mix of your current situation and your past behavior, such as missed payments. A critical factor in determining credit scores is debt. The Bank of Canada notes that Canadian household debt has been growing for thirty years. Average household debt now stands at 170% of household income.

A bad credit score can develop to the point where you can no longer get help to fix the problem. More households are carrying credit score damaging debt, and more are denied assistance.

So, what can citizens do if they need to borrow money but have a bad credit score?

Alternative Lending

Credit scores are essential across the financial industry. Yet, different lenders emphasize it differently.

The big six Canadian banks rate credit score as a significant factor in the approval for loans - this is partly business preference, and partly national legislation. The main problem with this approach is that it doesn’t focus on the main criteria for a loan. Can a borrower afford it with their current financial setup?

The problem can be even more acute for some borrowers - borrowers who are seeking a second mortgage, for example. The most common reasons for a second mortgage are to pay off outstanding bills and pre-sale home improvement. In both these instances, the borrower is going to be better off in the short term than they are today. Lending to them should focus on that and their ability to pay.

A citizen may have a period in their life where they have been financially irresponsible. So, they need to get a loan to merge and manage their debts. They will likely be turned away by the banks and left to face bankruptcy - this is where alternative lenders have made their mark. Ranking borrowers on their potential to pay means they can work with people no longer supported by the mainstream.

Alternative lending has seen consistent growth over the last ten years. Strict regulations and emphasis on credit scores are forcing lenders from the mainstream. What they find with alternative lenders is an emphasis on the role the loan will play in the borrower’s life.

Alternative Lenders

Besides offering services the big banks don’t, alternative lenders compete with them. Many alternative lenders are specialized businesses whose trade is lending. They fight for customers of all types and have a range of products that most banks do not.

With searching, borrowers can find better deals with alternate lenders than the mainstream. Recent surveys show that satisfaction with alternative lending is leading to permanent change. More than half of those approved for alternative loans said they would be unlikely to return to the mainstream.

Alternative lenders offer borrowers a way to improve their financial situation.

Taking an Alternative Approach

One of the biggest hurdles to finding an alternative lender is the choice available. Unlike the big six banks, there are many different kinds of alternative lenders. It can be hard to know where to start once the mainstream lenders reject you.

Canadalend.com has a range of independent experts. They have many years of experience in the mainstream and alternative financial markets. When you talk to someone at a bank, the bank incentivizes them to sell you a specific product. Our experts will help you find the right product for you.

If you contact Canadalend.com today, we can be your guide to the many alternative lenders out there. We can help you find the product you need to meet your financial aims.