Thinking Outside the Mortgage Box: Innovative Financing Solutions for Homebuyers in 2024

In the lending world, Alternative or “B” lending is often viewed as a four-letter word, borrowers

feel it’s a stain that means that they aren’t good enough for the traditional “A” side. While Alt

lending does exist for borrowers with past credit issues many others use it to improve their

overall wealth. This can work for borrowers with easily proved income as well as those who are

self-employed with a lot of write-offs come tax time.

The realities of the current interest rate environment mean many borrowers with solid income

still can’t qualify for the same purchase price they did a couple years ago. This can leave

buyers just short of the home they really want when looking to the A lenders but since

alternative lenders can use higher qualifying ratios and potentially a 35 yr amortization we can

usually stretch someone’s buying power a significant amount using an Alternative lender. In

addition, the alternative lending world has revenue-based options for those who are self-

employed allowing for a higher qualifying purchase price while maintaining the tax efficiency of

your income.

Both of these scenarios mean that there’s a better chance of finding the home you really want

at today’s prices before the market starts to heat back up as rates decline and for many, we can

look to move your mortgage back to the A side in a year or two once rates ideally get back into

“normal” territory again.

When comparing 1 yr fixed rates, they aren’t much higher on the alt side than the A side. The

Alt side does require a minimum 20% down payment and a 1-1.5% fee would apply but when

comparing that fee to potentially paying a much higher price on the same house in 1-2 years

time there’s usually a significant savings when using the alternative route.

Courtesy of James Leitch

Mortgage Agent – Level 2

Mortgage Brokers Ottawa Licence #11759

613-266-9106

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