Calgary Mortgage Tips

The Benefits of Non-Bank Lenders

Did you know that if we didn’t have non-bank lenders the Big 5 Banks wouldn’t have that much competition and rates would be a lot higher and there wouldn’t be as many mortgage products to choose from. You can only access these lenders through a mortgage broker as they don’t have branches likes banks do.

These lenders are able to offer lower mortgage rates because they don’t have the overhead costs such as owning branches like banks do as well they save on advertisement because they go through the broker channel. They tend to have better mortgage products because they are competing with the banks for market share. They’re much more likely to offer unique mortgage features – such as better prepayment options, flexible payment frequencies, and unique products such as cash-back mortgages – while at the same time offering a little more flexibility when it comes to clients with lower credit scores, or those that are self-employed or commission-based.

Just because these lenders are not considered “banks” doesn’t mean that they don’t have to follow the same rules, regulations and underwriting guidelines as the big Banks. One of the other benefits are that some of these lenders have access to all 3 mortgage default insurers CMHC, Genworth and Canada Guaranty, which increases the chances of your deal getting approved as they have more options. It’s just like having more than one bank to go to, just because you don’t fit into their box doesn’t mean you won’t fit into the other box. I personally have done many deals where CMHC didn’t like the deal but Genworth had no problem doing it, because they have different guidelines just like the banks.

There are some non-bank lenders who would be considered “sub-prime” lenders who have some great products for those who need a short term strategy or who don’t qualify with the prime lenders.   There are many non-bank lenders who only do “A” business and they are the reason that we have so much to choose from in regards to rates and products. If you have any questions please feel free to contact me, I am here to help 403-803-6625. You can also check out my website for more information.

June 22, 2010 Posted by jackiefrost | Lenders, Uncategorized | 2 Comments