Subprime Mortgages

In Canada, Subprime mortgages are openly available for all types of applicants. Subprime Mortgages are mortgages where the interest rate on the note is higher throughout the term of the loan. They are intended for applicants with impaired credit scores and the higher interest rate is a compensation to the lender for accepting greater risk. With that being said, if you are interested in a Subprime Mortgage because you’d like to take out a loan but you aren’t having a lot of luck because of your credit score, Smarter Loans is able to help you acquire one in an efficient manner.

In Canada, Subprime Mortgages are easy to get as long as you are connecting with the right mortgage companies that deeply understand your needs. We are committed to helping you find a mortgage company that is able to offer you a Subprime Mortgage confidently, establishing both a mutually beneficial relationship while also solving your situation and unique set of needs. Subprime Mortgages are very common in Canada and we’ve taken the initiative of assembling a directory below that includes all of the top lenders for subprime mortgages all in a single directory. If it’s a subprime mortgage that you are interested in, all you need to do is scroll down and compare the terms, rates and offers in order to discern which one is best for you.

Keep in mind that the interest rate is higher than traditional mortgages, but if you are prepared then click “apply now” in order to proceed to a brief online application. You can also alternatively pre-apply with Smarter Loans and in that case, we’ll select a subprime mortgage on your behalf, then assign it to you.

We can help connect you with the top subprime mortgage providers in Canada.

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Top Subprime Mortgages Providers in Canada

Company
Amount
Interest Rate
Reviews
Terms
$50,000 - Unlimited
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What is a Subprime Mortgage and How Does it Work?

 

A subprime mortgage is for borrowers who don’t meet the standard lending criteria. Alternative and private lenders offer subprime mortgage. Since subprime borrowers typically carry more risk, the rates tend to be higher and often come with a fee from subprime lenders.

Before approving you for a mortgage, lenders consider four main factors for borrowers: your income, down payment, credit and the property itself.

Credit is a common reason why you might seek out a subprime mortgage. If you have poor or damaged credit, prime lenders such as the big banks and credit unions might not consider you. That’s when you’ll need to seek out mortgage financing from a subprime lender to close the deal. If you’re new to Canada or lack a credit history, that’s when subprime mortgages can make sense, too.

Although poor credit is often the first thing that comes to mind for subprime mortgages, there are other reasons why you might seek them out. Ideally, when you’re applying for a mortgage, you’re a salaried employee who’s been with their employer for at least two years. Unfortunately, not everyone fits into that category. Some borrowers will need to use stated income (future income not yet earned) to qualify. Likewise, if you’re a business owner not showing very much income, you might need to go with a subprime lender because you don’t have enough income to qualify with a prime lender.

Your credit and income may be perfectly fine, but sometimes it’s the properly itself. If you’re buying a unique property type like a house boat or plot of land, prime lenders may not want to touch it, so subprime lending may be your only choice. Likewise, sometimes you make an offer on a property and the lender discovers issues during the appraisal, which can cause the property to move from the prime to subprime side.

Why You Might Choose a Subprime Mortgage

Most borrowers don’t initially seek out subprime mortgages. It’s only when a prime lender that you might look at subprime mortgage financing turns you down.

The biggest benefit of a subprime mortgage is that it helps you close the deal. If prime lenders have turned you down, you might have no choice but to go with a subprime lender. By not seeking out financing from a subprime lender, more than likely you won’t close the deal. This can lead to devastating consequences. Not only might you not close on the deal, the home seller could end up suing you, along with the seller’s real estate agent.

When going with a subprime mortgage, it’s important to remember that it’s not forever. By rectifying the issue that caused you to go to the subprime space in the first place, you may be able to move into the prime space sooner rather than later. For example, if your credit score is low due to a high credit utilization, by paying down the outstanding balances on your credit card, you can help improve your credit score and perhaps qualify with a prime lender.

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More Articles About Other Types of Mortgages

Types of Subprime Mortgages offered:

  • First Mortgage
  • Residential Mortgage
  • Second Mortgage
  • Commercial Mortgage
  • Mortgage Refinancing
  • Home Equity Line of Credit
  • Fixed Rate Mortgage
  • Debt Consolidation
  • Variable Rate Mortgage
  • Cashback Mortgage
  • First Time Homebuyers
  • Construction Mortgage
  • Self Employed Mortgages
  • Bridge Financing

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