B Mortgages

This is a type of mortgage where the income and credit requirements are more flexible than conventional mortgages. Often it is a business owner’s best friend because these lenders understand that the tax return does not provide the full picture on the borrower’s ability to support that mortgage. These lenders also understand a lower credit score does not mean an unacceptable risk. As a result, you will be able to borrow more money with a lower credit rating than regular lenders.

The rate for B mortgages varies based on the amount of down payment, the credit score and the length of the term. For the best case scenario you can estimate the 2 year rate for a B mortgage to be about the same as a 5 year fixed rate for a normal mortgage. Because these rates vary a lot with the particular circumstance, it is best to call me for an update.

The additional costs for a B mortgage over a regular mortgage at the bank are basically the lender fee and the renewal fee. 95% of the time, the lender fee is 1% of the mortgage amount and that is added on to the mortgage so you do not need to pay it out of pocket. And this is a one time fee. Some lenders charge a renewal fee and typically it is in the range of $250 to $500.

Typically B mortgages are used to purchase property. Either because the banks are asking for too much income or better credit; or you have too many properties.  However, if a B mortgage was used in a refinance, the money can be used for anything.

One to two year terms is usually the sweet spot for a B mortgage based on the rate and potential payout penalties. 

Typically, there should be a strategy to move you into a regular mortgage over time.

Some business owners who get a mortgage at the bank with 20% down payment can be charged an insurance premium of 3.3% of the mortgage amount.  In this scenario, it may be cheaper to get a B mortgage first and transfer to a regular mortgage later when your situation has improved.

The next step is to contact me. Either give me a call or send me a note. The initial contact will let you know whether a B mortgage is the solution for you.