Mortgages

Bank, B lender or private: the three kinds of mortgage

In Ontario a mortgage comes from one of three kinds of lender. Each looks at different things and costs a different amount. Here is how they compare, and who each one suits.

Not sure which one is you? Four quick questions, and you see which kind of lender fits and why.

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	Bank	B lender	Private
Who lends	The big banks, credit unions and national mortgage lenders.	Trust companies and other regulated lenders who look past the bank's checklist.	Individual investors and mortgage investment companies.
What they look at most	Your credit score, income you can show on paper, and how much of it already goes to debts.	Your whole situation, including income that is hard to show on paper and credit that took a hit.	The equity in your property, and how you will pay the loan back.
What it costs	The lowest rates. Usually no fee to the lender.	Higher than a bank. Often a lender fee, and sometimes a broker fee.	The highest of the three, with lender and broker fees on top.
How long it lasts	Anywhere from 1 to 10 years. Five years is the most common.	Usually 1 or 2 years, as a step back to a bank.	Short, usually a year or less, with a plan to pay it off or move on.

Bank mortgages

Who lends: The big banks, credit unions and national mortgage lenders.
What they look at most: Your credit score, income you can show on paper, and how much of it already goes to debts.
What it costs: The lowest rates. Usually no fee to the lender.
How long it lasts: Anywhere from 1 to 10 years. Five years is the most common.

B lender mortgages

Who lends: Trust companies and other regulated lenders who look past the bank's checklist.
What they look at most: Your whole situation, including income that is hard to show on paper and credit that took a hit.
What it costs: Higher than a bank. Often a lender fee, and sometimes a broker fee.
How long it lasts: Usually 1 or 2 years, as a step back to a bank.

Private mortgages

Who lends: Individual investors and mortgage investment companies.
What they look at most: The equity in your property, and how you will pay the loan back.
What it costs: The highest of the three, with lender and broker fees on top.
How long it lasts: Short, usually a year or less, with a plan to pay it off or move on.

General information, not advice. What a lender offers depends on your credit, your income and the property.

Not sure which one you need?

You do not have to know. Tell Amar your situation and he will say which lenders are worth trying, and what each one would cost, before anything touches your credit.

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