Who Are Alternative Lenders?
Alternative lenders are not one single group. They include B lenders, credit unions, mortgage investment corporations and private lenders — each with different guidelines, pricing and risk tolerance.
← Back to the Alternative Mortgage SeriesDifferent Lenders Serve Different Types of Borrowers.
When a major bank is not the right fit, there are several other categories of lenders that may be able to help. The right one depends on the property, equity, income, credit and what the mortgage needs to accomplish.
B Lenders
B lenders are institutional mortgage lenders that typically serve borrowers who fall just outside traditional bank guidelines.
Credit Unions
Credit unions can sometimes offer more flexibility than the major banks, particularly when the overall borrower relationship is strong.
Mortgage Investment Corporations
Mortgage investment corporations, often called MICs, pool investor capital and lend it out through mortgages, usually with a strong focus on equity.
Private Lenders
Private lenders can be individuals or companies lending their own capital. They are often used for short-term, equity-driven or time-sensitive situations.
Specialized Alternative Institutions
Some lenders specialize in borrowers with unique income, credit or property situations that do not fit standard lending programs.
The Right Fit Depends on the File
No one category is automatically best. The right lender depends on the problem, the property, the cost and the exit strategy.
Alternative Lending Is a Market — Not a Single Product.
Different lenders solve different problems. Some focus on near-prime borrowers, some lend primarily against equity, and some are designed for situations that require speed or flexibility.
The objective is to match the borrower with the lender whose guidelines fit the situation while keeping the cost, term and exit strategy reasonable.
Different lender types are built for different borrower situations.
Rate, fees, legal costs and term all matter.
The more flexible the lender, the more important it is to understand why.
Alternative financing should usually have a clear next step.
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