Amid tighter bank rules, more Canadians turning to alternative lenders
Squeezed out by stricter bank regulations, a growing number of mortgage-hunting Canadians have been turning to non-traditional lenders to overcome borrowing hurdles like bad credit.
Due to stricter bank regulations, a growing number of mortgage-hunting Canadians have been turning to non-traditional lenders to overcome these new regulations. According to one economist, the rate in which these alternative lenders market share have been expanding at a rate of 25 per cent per year, first gaining much ground during the 2008-2009 recession.
These alternative lenders fill an important void created by the tightened government regulations. They provide solutions a range of potential borrowers such as:
- Individuals with wobbly credit
- Recently divorced
- Self-employed who draw a smaller income from their business
These types of mortgages due tend to come with higher than normal rates, ranging from 10%-15%. Though, alternative lenders give Canadians, who may have been rejected by banks, the opportunity to restore their credit.