Bad Credit Mortgage

Bank-Alternative ("B") Mortgage Solutions for Real People in Ontario

Low credit score? You may still qualify with 20% down or equity.

Bad credit can happen to anyone.

You may have missed payments, had collections, or gone through a difficult time. In Ontario, many people are declined for a mortgage simply because their credit score does not meet bank requirements.

Banks are very strict when it comes to credit. Even one issue can stop your approval.

This can feel frustrating, especially if your income is stable and you are ready to move forward.

The good news is that there are Mortgage Solutions through Alternative B Lenders that focus on your current situation—not just your past.

In most cases, you will need at least 20% down payment or home equity.

Who is this for

Credit score below bank guidelines (late payments, collections, high utilization).
Previous consumer proposal or bankruptcy.
Thin or re-establishing credit history.
Previous mortgage arrears or short-term credit hiccups.

Why Banks says 'No'

Banks follow strict rules when reviewing credit.

They usually look for:

* Strong credit history - shows credibility

* High credit score - indicates 'lower risk' borrower

* Clean payment record - less likely you will not miss mortgage payments

If your credit does not meet their standards, they will often decline your mortgage application in Ontario.

How Alternative B Lenders Help

Alternative B Lenders provide flexible Mortgage Solutions.

They focus on:

* Your down payment

* Your home equity

* Your current financial situation

They understand that credit issues can happen and look at the full picture instead of only your score.

With 20%+ equity or down payment, many borrowers can still qualify for a mortgage in Ontario.

When This Mortgage Solution Makes Sense

This Mortgage Solution may be a good fit if:

* You were declined by a bank due to credit

* You have at least 20% equity in your home

* Your credit is improving but not perfect

* You want to refinance or access equity

* You need a short-term solution while rebuilding credit

What You Need to Qualify

To qualify for this Mortgage Solution, most lenders will look for:

* At least 20% down payment or home equity

* stable source of income

* reason of low credit score and how it was or will be resolved

* A property in a major city or town in Ontario (some rural areas are accepted on exception)

* A clear exit strategy

Bank vs Alternative B Lenders vs Private Lenders

It helps to understand your options.

Banks:

* Lowest rates

* Very strict rules when it comes to credit score (usually need 650+)

Alternative B Lenders:

* Consider borrowers with credit scores as low as 550

* Slightly higher rates (highly depended on exact credit score)

* Require minimum 20% down or equity

* Flexible income guidelines but still need income to qualify

Private Lenders:

* Higher rates and fees

* Can qualify based on equity (stated income)

* Short-term only (1 or 2-Year max)

Many borrowers with bad credit are better suited to Alternative B Lenders because they offer lower fees and often, offer a more clear exit strategy than private lending

Real Example

A homeowner had a credit score around 610 after struggling to pay high credit card debts.

They had stable income but were declined by their bank.

With a Mortgage Solution through an Alternative B Lender:

* They were able to refinance up to 75% of the value of their home

* They were able to paydown all their debts and have one lower manageable payment

* The lender approved them based on common-sense approach, that this refinance will

significantly improve their credit score

Long-Term Plan

This Mortgage Solution is often a step forward.

Over time, you can:

* Improve your credit score

* Build strong payment history

* Refinance to a traditional bank mortgage

Common Mistakes to Avoid

Waiting too long to explore options, and credit score keep decreasing
Going to private lenders too quickly
Thinking a bank decline means no options

Apply Now

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Frequently Asked Questions

What’s the benefit of using a mortgage broker instead of going to my bank?

Banks can only offer their own rules, products, and rates. As brokers, we work with 50+ lenders —so we can shop around for the option that fits your situation, not just one bank’s box.

Why choose Mortgage Wars?

We specialize in non-traditional/Alternative “B” lending. Over the years, we’ve built strong relationships with alternative (and private) lenders and a deep understanding of their products and guidelines. That lets us structure your file the way lenders want to see it—turning real-world situations into real approvals.

What’s the difference between Prime (A), Alternative (B), and Private mortgages?

Prime (A): Bank-type mortgages for people with verifiable income and clean credit.

Alternative (B): For good borrowers who don’t quite fit bank rules—often self-employed or recovering from past credit issues.

Private: Funded by Mortgage Investment Corporations (MICs) and private investors with flexible guidelines—used when A or B won’t work; rates and fees are higher because risk is higher.

Do I really need 20% down or equity for “Alternative (B) Solutions”?

Yes. For purchases you’ll need at least 20% down; for refinances/debt consolidation/equity take-outs you’ll need at least 20% home equity. If you’re unsure where you stand, ask—we’ll run the numbers with you. Reverse Mortgages have higher requirements.

What rate will I get with an Alternative (B) Lender?

Alternative (“B”) rates are based on your full profile—property, equity, income, credit, and purpose. They’re typically around 1% above big-bank rates and well below Private. Reverse mortgages are around 2% higher than regular rates. We’ll shop lenders and present a clear written commitment with your rate, terms, conditions, and all fees so you can decide with confidence—no surprises.

What fees should I expect?

Prime (A) deals: No Broker Fee (lender pays us).

Alternative (B) deals: Expect a 1.0% Lender fee and we charge a flat Broker Fee of $1500 . Other brokers who specialize in Alternative Lending charge on average a 1.0% Broker Fee. Reverse Mortgages have NO Lender/ Broker Fee.

Private deals: Start around 2.0% Lender fees. We charge a flat Broker Fee of $3000, regardless of the size of the mortgage.
*** You’ll also have standard third-party costs like the appraisal and legal fees. We’ll disclose everything up front before you decide.

How fast can I get approved?

Once we submit a complete application, approvals often come back within 24–48 hours. Complex files can take longer, but we’ll set expectations right away.

What is the application process?

Step 1 — Strategy Call
We book a quick virtual strategy call to understand your goals, timeline, property details, and any constraints. We’ll outline the best path and what lenders will look for.

Step 2 — Application & Documents
After the call, we send a secure online application. You submit it and e-sign consent so we can review credit and share information with lenders as needed. You’ll also upload the initial documents (ID, income documents, proof of down payment, and—if refinancing—your mortgage statement/property tax). We’ll give you a simple checklist.

Step 3 — Approval & Appraisal (if required)
We shop lenders and obtain a written commitment outlining rate, term, payment, and conditions. We review it together and, if you’re happy, you e-sign to proceed. If an appraisal is required, we order it at this stage and handle any lender follow-ups.

Step 4 — Lawyer & Funding
The lender instructs an approved real-estate lawyer of your choice. You sign the final mortgage documents (in-office or virtually, where available) and funds are released on completion.