Turned down by the bank? A "no" today is not a no forever.
B and private lenders look past a credit score to your equity and your plan. Here is how they work, what they cost, and how to get back to a regular lender.
You've started an application.
Saves as you go · No credit check · A licensed mortgage professional follows up
How lenders look at credit rebuild & private lending borrowers
1Banks rely heavily on credit scores. B lenders and private lenders put more weight on your down payment or equity and your income.
2These loans cost more: higher rates and a lender or broker fee. They are meant to be temporary.
3Most private mortgages run 1 to 2 years, while you rebuild credit and move back to a regular lender.
4After a bankruptcy or consumer proposal, many lenders want to see it completed and new credit used well.
Get ready
What lenders will ask you for
Your consumer proposal or bankruptcy discharge papers, if any
A short letter explaining what happened and what has changed
Income documents (pay stubs, employment letter, or Notices of Assessment)
Proof of down payment or a recent mortgage statement
Statements for any current debts
Your options
Which kind of lender fits you
Option 1
B lender
For bruised credit with steady income. Higher rate than a bank, usually 1 to 3 year terms.
Option 2
Private lender
Based mainly on equity. Fastest and most flexible, and the most expensive.
Option 3
Rebuild, then switch
Use the B or private loan as a bridge with a clear plan back to an A lender.
Avoid these
Common mistakes
!Taking a private mortgage with no plan to get out of it.
!Not reading the fees, penalties and renewal terms.
!Missing payments on the new loan, which closes the road back.
!Applying everywhere at once and stacking credit checks.
Take action
Your first steps
1Get your free credit reports from Equifax and TransUnion.
2Fix errors and pay down any collections.
3Get one secured credit card and pay it in full every month.
4Write a short note explaining your situation.
5Start the intake so a broker can map your path back to a regular lender.
The intake
What your application will ask
Your online application goes one topic at a time and saves every answer and document as you go, so you can stop and come back. It never runs a credit check, and a licensed mortgage professional reviews it and follows up.
For credit rebuild & private lending borrowers
What happened to your credit, and when (missed payments, collections, consumer proposal, bankruptcy)?
If a proposal or bankruptcy: when was it, or will it be, completed or discharged?
How have you re-established credit since (secured card, car loan, on-time payments)?
Plus the basics everyone answers 13
Your full name, email, mobile number and the best time to call.
The city you live in, and whether you are a Canadian citizen, permanent resident, or other status.
Are you applying alone or with someone else? If with someone, their name and how you are related.
Your goal: buy, refinance, renew, take out equity, or consolidate debt?
The property type (house, condo, multi-unit) and the city it is in.
Will you live in it, rent it out, or both?
The purchase price or estimated value, and your target closing or renewal date.
Your down payment or available equity, and where it comes from (savings, RRSP/FHSA, a gift, sale of another property).
Your approximate yearly household income before tax.
Your monthly debt payments: car loans, credit cards, lines of credit, student loans, support payments.
Your own estimate of your credit score: excellent, good, fair, poor, or not sure.
In the last 7 years, any bankruptcy, consumer proposal, collections, or missed mortgage payments?
May the broker contact you? (A credit check is only ever run later, with your separate written consent.)
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Answers
Questions people ask
Can I get a mortgage with bad credit in Ontario?
Often yes, through a B lender or private lender, especially with a solid down payment or equity.
What is the difference between a B lender and a private lender?
B lenders are regulated institutions with flexible rules. Private lenders are individuals or companies lending mainly on the property's value, at higher cost.
How long after a consumer proposal can I get a mortgage?
Some lenders will lend during or right after it; many regular lenders want 1 to 2 years of rebuilt credit after completion.
How do I get back to a regular bank?
Make every payment on time, rebuild your credit, and refinance to an A lender when your term ends.
Does starting the intake affect my credit?
No. It is only questions. A credit check comes later, with your permission.
General information, not mortgage, legal or tax advice. Lender rules change and every application is reviewed on its own facts. Your application and documents are stored privately and go only to a licensed mortgage professional at Top Mortgages Inc; they are never sold, and no credit check is run without your separate written consent.