During the COVID-19 pandemic, many Canadians from coast to coast have found themselves in a difficult position financially. The Canadian government temporarily implemented several stimulus programs to alleviate the financial burden caused by COVID-19. The most notable being the Canadian Emergency Response Benefit (CERB). However with CERB payments ceasing at the end of September, millions of Canadians will begin receiving Employment Insurance (EI) instead. EI is a government-run program that provides regular benefits to individuals who lose their jobs through no fault of their own.
What does this all mean for your mortgage? Whether you need to renew your existing mortgage, refinance, or purchase a new home, many Canadians are asking “how will I be able to meet the income qualifications while on reduced income?” In addition to this, the stresses and strains of income reduction has led to many Canadians seeing a drop in their credit score.
The Alternative Solution
Individuals without adequate documentation of income and/or with poor credit history may be turned away from the bank. However, don’t lose hope.
Alternative lenders are often equity-based lenders and as such consider the equity available in your property as part of the underwriting process. The more equity, the more forgiving they often are on qualifiers like income and even credit score.
Many alternative lenders will consider income from self-employment or even stated income. With stated income, often a letter outlining your income, possibly with some minor documentation to back your claim, may be sufficient to qualify. The self-employed individual may be able to rely upon standard business documentation (bank statements, invoices, contracts, etc.) to meet the lenders income verification standards.
In addition, alternative lenders or private lenders are generally more flexible with the credit history requirements. While you can expect good credit to smooth the path with any lender, a low credit score is often less of a concern with alternative lenders than at the bank.
Choosing an Alternative Lender That Fits Your Needs
Finding the right lender involves more than looking at competitive interest rates; you’ll want to work with a company that has your best interests at heart and can help you to make informed decisions about your future.
Finding a mortgage lender can be a daunting task. One common strategy to help is to seek the services of a qualified mortgage broker. They will help educate you on the process, ensure you are well informed and ultimately help you make the decision that’s right for you.
As an alternative lender, Alta West Capital provides solutions for people like you. With a quick and easy application, you can get your purchase, mortgage renewal or refinance underway today.
Click the link to begin your application and we will get back to you within 24 hours.
About Alta West Capital
Since 1991 we have helped Canadians in Alberta, British Columbia, and Ontario by providing them with mortgages and lending alternatives to meet their needs. We specialize in mortgages for first-time homebuyers, families that are new to Canada and self-employed business owners. We also offer debt consolidation services, mortgage refinancing, and mortgages for second homes or investment properties.
No matter what your situation, when you trust Alta West Capital for your borrowing needs, you will receive exceptional service and personalized solutions. Choose Alta West Capital and discover why more and more Canadians are embracing alternative mortgage lenders.