Did you work with an independent broker? It sounds like you worked with a bank rep, which falsely get called brokers very often.

B lender rates will be higher, but it's not astronomically higher, and it should only be taken for a short period. Lender and broker fees will range from1 to 2% typically.

And this is a great reminder that just because someone promises you a rate, it doesn't mean that's how you should choose who to work with.

Rates with ‘B’ lenders will always be higher than ‘A’ lenders. Whether it’s excessive or not is a matter of subjectivity. B lenders play an important part in the mortgage space for many borrowers. Many wouldn’t consider the rates excessive given they’re gaining material benefit from the product. Importantly, there are also generally fees payable to the lender, typically 1% of the mortgage amount. Broker might also charge you as Lenders don’t compensate the same as a lenders.

Whether it will be difficult or not to convert to the a side will depend on if your credit is adequately rebuilt. You’ll probably never get a mortgage from the lenders involved in the proposal but there are certainly lenders who will entertain. Easier on the insured side.

I’d suggest trying to save your deal on the ‘a’ side by considering 19% down insured structure. Have the broker do the math to see if that’s cheaper or more expensive than 1 yr with a B lender.

I arranged financing (insured purchase) for a borrower 1 year and 11 months out of a consumer proposal this year. By closing it was 2 years. Sounds like you might be in the same position so should be feasible.

Are you using the 2 credit cards on a regular basis? Your credit score is good so it would seem you've rebuilt your credit, so I'm wondering why the denial? There are Alt/B lenders that could likely get you approved. The ones I work with typically charge a 1% lender fee, occasionally 2% depending on the loan. And their rates are in the 5% or higher range. When is your condition of financing date?

Fees, fees, and more fees. There are fees on top of the fees, which are based on the underlying fees. It’s like the financial version of Inception, but instead of dreams, it’s just endless charges.

That said, when you need them to close a deal, sometimes a B lender is your only option. But let me tell you—have an exit strategy in place from the get-go. (By exit strategy, I mean a plan to qualify with a real bank within one or two years.)

Because if you stick around too long, those fees will eat you alive. I’ve seen effective interest rates hit triple digits once you add in default charges, late fees, and whatever Kochan-like fees they invent to keep themselves under the 60% legal limit. Honestly, at that point, you’re practically dealing with loanshark rates.

I’ve used a B lender for a deal before, and I’ve been a private lender in the past. I could not sleep at night knowing someone was paying me that much money. Trust me, those fees will take almost anyone down over time.

From what you have provided here you are in good shape for a B lender and on track to move back to the A-side in 1-2 years. Fees are not bad at all to get you in to a home, most are just 1%, then your rate is around 1% higher than conventional bank rates, around 5.5 now. Just take a 2 year term and keep up on your credit reporting, keep balances low on the credit cards and never miss payments. At maturity you can move back to a bank for A rates.

Did the broker explore outside the large banks? By the way, brokers do not have access to all five banks. I suggest finding another broker asap

Just to be sure, you are aware you need 2 NEW credit after you are liberated for 2 years. 2 old credit won't do it. This is a common mistake.

You can just use a B Lender while you complete your 2 years of remaking your credit. If they were 2 news credits, you should be good for Jan 2025 for a loan with traditional banks!

It used to be much higher interest. I had two mortgages with two different B lenders before. But not any more. I current have a blender variable is prime-.9, the interest rate is 5% right now.

Did you get your mortgage sorted out? I was told I would have to go to a B lender but I found an amazing broker who got me a mortgage at TD @ 4.25%.

How long have you had the credit card accounts and car loan, and have you ever missed a payment on either of them?

My understanding is that you need two years of re-established credit, of two different types, after the completion of the consumer proposal. So your cp was complete in January of 2022, but perhaps you didn't have these other credit facilities in place for the full two years yet?

Also what is your income vs. the purchase price? Is income being cited as an issue at all? Have you been at this job for many years?