Alternative & Bad Credit Mortgage Solutions

As a Dominion Lending Centres Mortgage Agent Level 2, these transactions are where experience, strategy, and lender access make the greatest difference for borrowers.

When traditional banks say no, it does not necessarily mean financing is impossible — it simply means a different approach is required.

What Is Alternative Lending?

In Canada, there are three primary categories of mortgage lenders. Each serves a different client profile with its own qualification standards, risk tolerance, and product offerings.

1️⃣ Prime (“A”) Lenders

Banks, Credit Unions, Trust Companies & Mortgage Finance Companies

Prime lenders offer the lowest rates and standard underwriting guidelines for borrowers who fit within traditional policies.

Typical A-Client Profile:

• Down payment as low as 5% (insured mortgage)
• Minimum 20% equity for refinances
• 620+ credit score with established credit history
• Debt servicing ratios within 39% GDS / 44% TDS
• Maximum 30-year amortization
• Full income verification required
• Self-employed borrowers must show 2-year average income (Line 15000)
• Bankruptcies or proposals fully discharged for at least 2 years with re-established credit
• No additional lender fees

Prime lending works best for borrowers who fit neatly within conventional guidelines.

2️⃣ Alternative (“B”) Lenders

Alternative lenders provide flexible solutions for borrowers who fall just outside traditional bank policies.

Rates are typically modestly higher than prime lending, and lender fees apply — but these programs offer significantly greater flexibility.

Typical B-Client Profile:

• Minimum 20% down payment or equity (uninsured mortgage)
• No strict minimum credit score
• Extended debt servicing ratios (often 50–60%+)
• Amortizations up to 35 years
• Flexible income verification for self-employed or commissioned borrowers
• Higher rental income offsets for investment properties
• Ability to refinance clients in consumer proposal
• Solutions for certain bankruptcy situations
• Financing available for properties held in HOLDCO structures
• Typically available in population centres of 5,000+ (many lenders require 50,000+)

Important:
If you have equity in your home and your bank declines your application, do not rush into bankruptcy or a consumer proposal without exploring refinancing options first. Alternative lending can often consolidate unsecured debt and stabilize your financial situation.

These programs can significantly extend affordability for purchases or refinances — helping clients protect assets and remain in their homes.

3️⃣ Private Lending

Private mortgages are equity-based solutions designed primarily for short-term or urgent situations.

Rates are typically higher than institutional lending, and fees apply, reflecting the increased risk and flexibility.

Private Lending Overview:

• Available for 1st, 2nd, or 3rd mortgages
• Minimum 20% equity required
• No minimum credit score
• Income verification may not be required
• No strict debt servicing ratios
• Approval based primarily on property value and marketability
• Available in population centres of 5,000+ (case by case)

Private lending is most effective when used strategically — often as a temporary bridge while credit is rebuilt or finances are restructured.

How Does a Bad Credit Mortgage Work?

Alternative and private lenders focus primarily on:

• Equity in your property
• Marketability of the home
• Demonstrated ability to manage payments

This approach is often referred to as “common-sense lending.”

Many responsible people encounter financial setbacks at some point, including:

• Job loss or income disruption
• Divorce or separation
• Business challenges
• Illness or injury
• High-interest debt accumulation
• Bankruptcy or consumer proposal

Credit cards charging 19–28% interest can trap families in minimum payments that barely reduce principal.

If this sounds familiar — you are not alone.

With sufficient equity, refinancing can:

• Consolidate high-interest debt
• Improve monthly cash flow
• Stabilize finances
• Provide a structured path to credit recovery

Why Clients Seek Bad Credit Mortgage Solutions

If you have sufficient equity and the ability to manage payments, there are often viable options available.

Clients typically choose this route for:

• Respectful, judgment-free guidance
• Practical solutions tailored to real-world situations
• Long-term recovery planning — not just short-term approval
• Fast turnaround times when urgency matters
• Clear communication throughout the process
• Support rebuilding credit and financial stability
• Strategic mortgage structuring aligned with future goals

Second Mortgage Loans

A second mortgage is an additional loan secured behind your existing first mortgage.

Because the lender is in second position on title, rates are higher to reflect the increased risk.

Why Consider a Second Mortgage?

Second mortgages are commonly used to:

• Consolidate high-interest debt
• Cover urgent expenses
• Access home equity without refinancing the first mortgage

Even at higher rates, second mortgages are often significantly less expensive than credit cards or unsecured loans.

Used strategically, they can:

• Improve cash flow
• Prevent default
• Support credit rebuilding
• Position you to return to prime lending sooner

How Do You Qualify for a Second Mortgage?

Lenders typically evaluate four key factors:

1️⃣ Equity
The more equity available, the stronger the application.

2️⃣ Income
Evidence you can manage the new payment.

3️⃣ Credit Profile
Credit affects pricing, but approval is often possible even with challenges.

4️⃣ Property
Location and marketability help secure the lender’s investment.

A Decision That Deserves Careful Guidance

Alternative and private mortgage solutions can be powerful tools — but they must be structured carefully to protect your long-term financial health.

Our role is to clearly explain the benefits, costs, risks, and exit strategies so you can make an informed decision with confidence.

As a Top 5% Mortgage Professional in Canada, Cam provides straightforward, judgment-free advice tailored to your situation — with no pressure.

The goal is not just approval, but stability, recovery, and a path back to prime lending whenever possible.

Serving Clients Across Niagara

We assist homeowners and borrowers throughout:

St. Catharines
Niagara Falls
Thorold
Welland
Fort Erie
Port Colborne
Grimsby
Lincoln
Niagara-on-the-Lake
And communities across Southern Ontario

Whether you are facing credit challenges, debt pressure, or a bank decline, we can help you evaluate your options and move forward with a clear plan.

Ready to Explore Your Options?

If your bank has declined you — that is not the end of the conversation.

There are solutions available.

Let’s review your situation confidentially and determine the most strategic path forward.

Use the Apply button or schedule a consultation to get started.

Contact me today for more information!