{"id":1426,"date":"2022-06-20T14:43:19","date_gmt":"2022-06-20T14:43:19","guid":{"rendered":"https:\/\/samansari.com\/?p=1426"},"modified":"2022-06-20T14:43:19","modified_gmt":"2022-06-20T14:43:19","slug":"alternative-lenders","status":"publish","type":"post","link":"https:\/\/samansari.com\/index.php\/2022\/06\/20\/alternative-lenders\/","title":{"rendered":"Alternative Lenders"},"content":{"rendered":"\n
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Interest rates plummeted to record lows at the onset of the COVID-19 pandemic \u2013 but now they\u2019re back on the rise across Canada, a trend that\u2019s seeing a marked shift towards the private and alternative lending spaces among many borrowers.<\/p>\n\n\n\n

Changes last year to stress test guidelines meant that a growing cohort of borrowers now have to qualify at higher rates than before (the higher of 5.25%, or the contract rate plus 2%) and find themselves increasingly turning to lenders that can often offer flexible solutions.<\/p>\n\n\n\n

That trend is likely to continue and grow in the coming years. <\/p>\n\n\n\n

\u201cHigher interest rates mean higher qualifying rates for the stress test, so I think that will definitely factor in on people\u2019s buying power with more restrictions on the bank side of things, it is going to open up the private space a lot more.<\/p>\n\n\n\n

\u201cThe opportunity to grow in this space is going to be great for business going forward. The” A” market is changing, and you need to evolve as well, to get to that “B” space.\u201d<\/p>\n\n\n\n

At the end of May around 6.7% of Canada\u2019s mortgage business so far in 2022 came from private lenders or credit unions, a sizeable increase over last year when those lenders made up just 3.7% of overall mortgage funding.<\/p>\n\n\n\n

It\u2019s clear that many Canadians\u2019 eyes have been opened to the viability of private solutions, especially as lenders in that space are often able to offer quick turnarounds that sometimes aren\u2019t available through more traditional lenders.<\/p>\n\n\n\n

That\u2019s something we\u2019re seeing more of because of the recent rate increase and the higher stress test qualifying rate.<\/p>\n\n\n\n

\u201cWe can step in and fund deals quickly to help out in the purchasing process. It\u2019s a good short-term solution to get the purchase completed and then work towards getting back to the A space.\u201d<\/p>\n\n\n\n

That\u2019s proven popular among borrowers, Thompson said, not least because it means they\u2019re now able to close on a home purchase without losing a deposit, something that can happen when they can\u2019t secure funding from their first-choice lender.<\/p>\n\n\n\n

As many lenders become more conservative and ramp up their qualification criteria, Pillar is ready to help borrowers who suddenly find themselves refused a mortgage by those organizations, said Thompson \u2013 for instance, in the business-for-self (BFS) arena.<\/p>\n\n\n\n

With a chronic lack of supply still a clear problem in Canada\u2019s housing market, the importance of construction is only set to grow in the coming years \u2013 and Pillar is well placed to assist borrowers in need of construction financing, Thompson said, with that representing one of the company\u2019s best-established niche products.<\/p>\n\n\n\n

\u201cConstruction is still going strong,\u201d he pointed out. \u201cWe\u2019re a solution-based lender, and we\u2019re here to help borrowers in any situation. If it\u2019s business-for-self, if it\u2019s a quick close, if it\u2019s a construction, there\u2019s plenty we can do to find the right solution.\u201d<\/p>\n\n\n\n

Interest rates are rising, and borrowers are finding it more difficult to qualify for a mortgage \u2013 not least because there\u2019s little sign that home prices are falling dramatically across most of Canada\u2019s regional housing markets.<\/p>\n\n\n\n

Those factors mean that alternative and private lending solutions for Canadians are only set to grow in popularity, according to Thompson, and he said that brokers should recognize the strong potential for business that exists for them in the space.<\/p>\n","protected":false},"excerpt":{"rendered":"

Interest rates plummeted to record lows at the onset of the COVID-19 pandemic \u2013 but now they\u2019re back on the rise across Canada, a trend that\u2019s seeing a marked shift towards the private and alternative lending spaces among many borrowers. Changes last year to stress test guidelines meant that a growing cohort of borrowers now […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/samansari.com\/index.php\/wp-json\/wp\/v2\/posts\/1426"}],"collection":[{"href":"https:\/\/samansari.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/samansari.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/samansari.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/samansari.com\/index.php\/wp-json\/wp\/v2\/comments?post=1426"}],"version-history":[{"count":1,"href":"https:\/\/samansari.com\/index.php\/wp-json\/wp\/v2\/posts\/1426\/revisions"}],"predecessor-version":[{"id":1427,"href":"https:\/\/samansari.com\/index.php\/wp-json\/wp\/v2\/posts\/1426\/revisions\/1427"}],"wp:attachment":[{"href":"https:\/\/samansari.com\/index.php\/wp-json\/wp\/v2\/media?parent=1426"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/samansari.com\/index.php\/wp-json\/wp\/v2\/categories?post=1426"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/samansari.com\/index.php\/wp-json\/wp\/v2\/tags?post=1426"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}