B lender FAQ
What determines my b lender mortgage rate?
Down payment/ equity, credit score, income are risk factors and are priced into the rates.
The down payment minimum for a b lender mortgage is 20%. As the down payment available increases from this point, this can lower the mortgage rate because it reduces lender risk.
Credit scores can be lower than 650 or impaired, however b lenders will ask questions about why the credit is damaged to help determine if there may be continued lower score. The lower the credit score, the higher the rate. If the score is good (higher than 680), the rates may be similar to A lender, prime mortgages. If the credit score is bad (under 600), rates may be closer to private lender, C mortgage rates.
If income can be shown using a paystub or 2 years of tax returns, the rates will likely be lower. However, if income is ‘stated’ and, for example, bank statements are used to determine cash flow, then this can add a risk premium to the rate.
How do I qualify for a b lender mortgage?
Qualifying for a b lender mortgage can be easier than applying for a traditional bank mortgage, especially if credit is not too bad and substantial equity is built up in the home. A standard mortgage application and supporting documents are required to get approved from a b lender.
How can I lower a b lender mortgage rate?
The easiest way is to work with an experienced mortgage broker to shop the application around the market. Even without any changes to the application, the rates lenders offer will vary. Sometimes it’s possible to make small application changes that will help to lower the rate as well. For example, if it might be easy to increase credit by 50 points quickly, this could help reduce the mortgage rate.
Finally, and maybe most importantly, the b lender mortgage is typically used as a stepping stone and can be refinanced with a lower rate, A type lender at the end of the term.
What are the b lender fees?
Typically B lenders charge lender fees in the 1% – 2% range and this fee can be bundled into the principal mortgage amount. Along with shopping for rate, an experienced mortgage broker will work with you to help ensure b lender fees are the lowest possible.