8 May

Understanding Mortgage Refinancing: A-Side vs. B-Side Lending in Canada

General

Posted by: Avaljit Sandhu

Understanding Mortgage Refinancing: A-Side vs. B-Side Lending in Canada

By Avaljit Sandhu, Mortgage Professional – Dominion Lending Centres

What Is Mortgage Refinancing?

Refinancing is when you replace your existing mortgage with a new one, often with different terms. This can help you:

  • Access equity (cash out refinance)

  • Consolidate debt

  • Get a better interest rate

  • Change your mortgage term or product type

Whether you refinance with an A-side lender (bank or credit union) or a B-side lender (alternative lender), the process and goals are similar — but qualifications, rates, and costs vary.

A-Side Refinance: What You Need to Know

Who Are A-Side Lenders?

A-side lenders are traditional banks and credit unions. They offer the lowest rates but have strict qualification rules.

Key Features of A-Side Refinancing:

  • Low interest rates (based on posted rates or discounted offers)

  • Qualify using the stress test (current rate + 2%)

  • Ideal credit score needed (680+ typically preferred)

  • Low debt ratios

  • Income proof is a must (e.g., full-time, stable job or solid business income)

Best For:

  • Homeowners with good credit, consistent income, and low debt

  • Those looking to access equity for renovations, investments, or large purchases

B-Side Refinance: What to Expect

Who Are B-Side Lenders?

B-lenders are alternative lenders who provide options for people who don’t fit into the strict rules of big banks. They are also fully regulated and legal lenders.

Key Features of B-Side Refinancing:

  • Higher interest rates (but often still lower than unsecured debt)

  • Easier qualification (flexible on credit and income)

  • Can use stated income (for self-employed or commission-based)

  • Shorter terms (usually 1–2 years, interest-only sometimes offered)

  • Lender/broker fees apply (often 1–2%)

Best For:

  • Self-employed borrowers with non-traditional income

  • People with bruised credit or recent financial challenges

  • Homeowners needing to consolidate high-interest debt quickly

Why Consider Refinancing?

✅ Consolidate Debt

Roll credit card, line of credit, or personal loan balances into one monthly mortgage payment — often at a lower rate.

✅ Access Equity

Use the value in your home to renovate, invest, pay tuition, or support a business.

✅ Lower Your Monthly Payments

Refinance into a longer term or lower rate to reduce your cash flow burden.

✅ Change Your Mortgage Type

Switch from a variable to fixed rate (or vice versa) based on your comfort with risk.

Important Considerations Before Refinancing

💡 Mortgage Penalties

If you break your mortgage early, your current lender may charge a penalty. We’ll review this cost upfront.

💡 Legal & Appraisal Fees

Refinancing requires a new mortgage contract, and legal or appraisal costs may apply (especially on B-side deals).

💡 Qualification Rules

Whether it’s A or B-side, we’ll help you understand how income, credit, and equity affect your approval.

How I Can Help

As a mortgage professional with Dominion Lending Centres, I shop both A and B lenders to help you refinance with the best option for your unique situation. I guide you through:

  • Reviewing current mortgage and penalties

  • Calculating how much equity you can access

  • Comparing A vs. B lenders

  • Understanding rates and fees

FAQ: Refinancing in Canada

Q: Can I refinance with bad credit?

A: Yes — B-side lenders offer refinance options for clients with lower credit scores or past delinquencies.

Q: How much equity do I need to refinance?

A: You usually need at least 20% equity (i.e., your mortgage balance must be 80% or less of your home’s value).

Q: Do I need income to refinance?

A: Yes — but B-lenders are more flexible. Self-employed or commission earners can use bank statements or stated income.

Q: How long does refinancing take?

A: Typically 2–3 weeks, depending on the lender, appraisal, and how quickly documents are submitted.

Ready to Refinance? Let’s Talk

Whether you’re a homeowner with perfect credit or someone facing challenges, I can help you explore refinancing solutions on both A and B sides.

📞 Call or text: 204-914-6812
📧 Email: avaljit@mortgagebyaval.ca
🌐 www.avaljitmortgages.ca

1 May

The Hidden Advantages of Mortgage Pre-Approval Most Home Buyers Miss

All

Posted by: Avaljit Sandhu

🏡 The Hidden Advantages of Mortgage Pre-Approval Most Home Buyers Miss

By Avaljit Sandhu – Mortgage Professional, Dominion Lending Centres

Mortgage Pre-Approval Is More Than Just a Budget Tool

When most people think of mortgage pre-approval, they assume it’s just about knowing how much they can afford. While that’s true, pre-approval offers several hidden benefits that can give you an edge in Manitoba’s competitive real estate market.

Let’s uncover those lesser-known advantages and how they can help you buy with confidence.

Why Pre-Approval Matters in Today’s Market

In a province like Manitoba, where home prices are stable but rising, being financially prepared is critical. With more buyers entering the market, sellers are looking for buyers who are ready to act fast.

A mortgage pre-approval sends a strong message:

✅ “I’ve done my homework. I’m ready to buy.”

The Overlooked Benefits of Pre-Approval

1. Confidence in Negotiations

When you know your financing is likely to be approved, you walk into negotiations with stronger confidence. You know your limits and can negotiate firmly.

2. Better Relationship with Your Realtor

Agents love working with pre-approved clients. It helps them focus on homes you can realistically afford and speeds up the search process.

3. Protects You from Rate Increases

If rates are expected to rise, a pre-approval with a 120-day rate hold can save you thousands over your mortgage term.

4. Allows You to Spot Weak Points in Your Application

Sometimes clients don’t realize they have issues like inconsistent income, outdated credit reports, or unverifiable funds. Pre-approval helps you fix these early.

The Pre-Approval Process – What to Expect

Working with a mortgage broker in Winnipeg makes the pre-approval process smooth and stress-free.

Here’s a simple breakdown:

Step 1: We Review Your Income and Credit

This includes:

  • Job letter

  • Paystubs

  • T4s and Notices of Assessment

  • Credit check (soft pull through a broker)

Step 2: Review Your Down Payment

We ensure your bank statements are acceptable and verify the source of your funds.

Step 3: Rate Lock and Guidance

You get a rate hold and advice on next steps, so you can begin your home search with a clear strategy.

What If You’re New to Canada?

If you’re on a work permit or a new permanent resident, pre-approval also shows lenders how you’re establishing financial stability. You may be asked to show:

  • Alt credit (like rent, car insurance, or phone bills)

  • Bank statements

  • Status documents

Pre-approval helps newcomers prove they’re mortgage-ready.

Final Thought: Don’t Shop Without It

Buying a home without pre-approval is like bidding at an auction with an empty wallet. Even if you’re early in your journey, pre-approval is risk-free, free of charge, and gives you a head start.

FAQ – Pre-Approval Questions Answered

Q1: What if I change jobs after getting pre-approved?
This could affect your application. Always consult your mortgage broker before making major changes.

Q2: Can I get pre-approved with student loan debt or credit cards?
Yes. We factor in your debts to calculate what you can afford.

Q3: Can I get pre-approved if I’m self-employed?
Absolutely. You’ll need two years of tax returns and possibly business financials.

Q4: How long does a pre-approval last?
Typically 90–120 days.

Q5: Is there a cost to get pre-approved?
No. As a licensed broker, I provide this service free of charge for home buyers.

✅ Need Help Getting Pre-Approved?

Let’s talk! I can walk you through the process, answer questions, and help you feel confident about buying in Manitoba’s housing market.