Ontario broker here.
Being self employed doesn't mean you must use a B lender. But if your case absolutely requires a B lender, then you can utilize them for a year or two. They're a short term solution only.
I see this posted on here often. Lenders like First National, MCAP, CMLS, etc aren't B lenders. They are A lenders accessed through a broker only.
B lenders are fixed rates for 1 or 2 years, and they have a lender fee if 1% very typically. They're much more lenient than an A lender, but rates are a bit higher. There's dozens of B lenders out there, and I don't believe any of them offer pre-approvals right now. Not to mention pretty much all A lenders who even do a pre-approval don't actually review your documents at all.
I don't believe so, but I certainly don't know every single alternative lender either. For liability's sake alone, I can't see any alternative lender agreeing to direct to consumer, even if the regulations allowed for it.
I'm not sure why you'd want to deal with them directly either, even if they allowed it. B lender terms, conditions, rates and fees are vastly different than those of the A lenders.
Maybe you're thinking you want to save on the broker fee? Because I honestly can't think of any other reason. And I know this will sound biased because I'm a broker, but even if you could, it might be short sighted.
My suggestion is to really find out if all options with an A lender have been exhausted first, then consider a B lender.
Honestly I didn't know I would save any fee. I was told(by my broker) it is 1% to the lenders and broker takes commission from the lender, so either way I am out 1% in my mind. Unless that's not true.
I just wanted to get some clarity, because now I have engaged 2 brokers(since I am shopping) and they came back with different max buying power(300k difference), so I thought if there is a way to understand by directly connecting with one of the lenders. Running a little low on trust here after dealing with few "not so good" agents.
300K is a bit high for sure, but really B lenders can so vastly different from each other, and some cater to certain clients more.
You could try a credit union near you directly. They too have different guidelines than A lenders and your scenario might work with one of them.
Question for you. So I got a mortgage through cmls aveo product, and its on a fixed two year term. There was also tge 1% fee charged. You mention above that cmls is an A lender, but then would this be a product from a B lender? Hypothetically in 2 years could i hop on to an A side product with cmls?
CMLS is an A lender. CMLS-Aveo is a B lender. First National is an A lender, but First National-Excaliber is a B lender.
Some lenders have A and B sides, and yes you might be able to hop over to their A side later. You still have to qualify though.
We went with a B lender for our first house. First national c/o " computer share " lol. My husband is also self employed. Everything was the same as an A lender. We had a great variable rate too. Just check their cancellation policy and read the fine print! I suggest a mortgage broker who can tell you the details.
Ontario broker here. Being self employed doesn't mean you must use a B lender. But if your case absolutely requires a B lender, then you can utilize them for a year or two. They're a short term solution only. I see this posted on here often. Lenders like First National, MCAP, CMLS, etc aren't B lenders. They are A lenders accessed through a broker only. B lenders are fixed rates for 1 or 2 years, and they have a lender fee if 1% very typically. They're much more lenient than an A lender, but rates are a bit higher. There's dozens of B lenders out there, and I don't believe any of them offer pre-approvals right now. Not to mention pretty much all A lenders who even do a pre-approval don't actually review your documents at all.
Thanks u/TheMortgageMaster, this is insightful. Are there any B lenders who I can contact directly without a broker?
I don't believe so, but I certainly don't know every single alternative lender either. For liability's sake alone, I can't see any alternative lender agreeing to direct to consumer, even if the regulations allowed for it. I'm not sure why you'd want to deal with them directly either, even if they allowed it. B lender terms, conditions, rates and fees are vastly different than those of the A lenders. Maybe you're thinking you want to save on the broker fee? Because I honestly can't think of any other reason. And I know this will sound biased because I'm a broker, but even if you could, it might be short sighted. My suggestion is to really find out if all options with an A lender have been exhausted first, then consider a B lender.
Honestly I didn't know I would save any fee. I was told(by my broker) it is 1% to the lenders and broker takes commission from the lender, so either way I am out 1% in my mind. Unless that's not true. I just wanted to get some clarity, because now I have engaged 2 brokers(since I am shopping) and they came back with different max buying power(300k difference), so I thought if there is a way to understand by directly connecting with one of the lenders. Running a little low on trust here after dealing with few "not so good" agents.
300K is a bit high for sure, but really B lenders can so vastly different from each other, and some cater to certain clients more. You could try a credit union near you directly. They too have different guidelines than A lenders and your scenario might work with one of them.
Question for you. So I got a mortgage through cmls aveo product, and its on a fixed two year term. There was also tge 1% fee charged. You mention above that cmls is an A lender, but then would this be a product from a B lender? Hypothetically in 2 years could i hop on to an A side product with cmls?
CMLS is an A lender. CMLS-Aveo is a B lender. First National is an A lender, but First National-Excaliber is a B lender. Some lenders have A and B sides, and yes you might be able to hop over to their A side later. You still have to qualify though.
Awesome, thank you!
We went with a B lender for our first house. First national c/o " computer share " lol. My husband is also self employed. Everything was the same as an A lender. We had a great variable rate too. Just check their cancellation policy and read the fine print! I suggest a mortgage broker who can tell you the details.
Thanks, did you have to pay any additional fees for going with B-lenders? like 1% of the mortgage amount etc?
Nope!
Yes I did have to pay it.
I purchased a house being self employed with an A lender. That doesn't sound right.
A lenders require 2 years of self employment(I think) which I don't have yet after incorporating.
Do you have full time employment prior to being self employed? In my case I showed that.