The Back to A Lender Plan
Alternative and private mortgages are meant to be temporary. The Back to A Lender Plan is a written one to two year roadmap that rebuilds your credit, documents your income and lowers your loan-to-value, so at renewal you qualify with a prime lender instead of paying alternative pricing again.
Who this is for
- You are in a private or second mortgage and the one-year term is running out.
- You are with a B lender paying 1% to 2% more than prime and a lender fee every renewal.
- You went through a consumer proposal, bankruptcy or separation and need a rebuild timeline.
- You were approved on equity alone and want a real strategy rather than another renewal fee.
- You are self-employed and need two clean years of documented income before a prime lender will look at you.
- Nobody has ever given you an actual date for when this gets cheaper.
How it works
- 1
Month 0: the gap analysis
We measure exactly what stands between you and a prime approval: credit score, ratios, income documentation, loan-to-value and any arrears or collections. You get it on one page with target numbers.
- 2
Months 1 to 3: stop the bleeding
Arrears cleared, collections settled and reported, revolving balances brought under 30% of their limits, and any missed payment risk removed with automatic payments.
- 3
Months 3 to 12: rebuild the score
Two or three active trade lines reporting on time, a secured card if needed, no new hard inquiries, and no closing of old accounts. Most clients gain 60 to 120 points in a year.
- 4
Months 6 to 18: document the income
For self-employed clients this means two consecutive years of filed returns with enough declared income, plus a clean set of business bank statements. We plan the filing with your accountant, not after the fact.
- 5
Months 12 to 18: lower the LTV
Accelerated payments, a lump sum where possible, and market appreciation together move you under 80%, which opens prime refinance options.
- 6
Months 18 to 24: the switch
We apply to a prime lender 90 to 120 days before the term ends, consolidate the first and second into one mortgage, and you stop paying alternative pricing.
What it costs
| Cost | Typical range | What it is |
|---|---|---|
| The plan itself | Free | Written gap analysis, targets and a quarterly check-in for existing and new clients. There is no charge for the roadmap. |
| Quarterly reviews | Free | A short call and a credit check every three months to confirm you are on track and adjust if something changes. |
| Exit refinance: broker fee | $0 | When the file moves to a prime lender, the lender pays the commission and you pay no broker fee. |
| Appraisal at exit | $400 to $700 | The prime lender will want current value confirmed to establish loan-to-value. |
| Legal fees at exit | $1,200 to $1,800 | Discharging the private or B mortgage and registering the new prime charge. |
| Discharge fees | $275 to $400 per mortgage | Charged by each existing lender being paid out. |
The plan costs nothing. The savings show up as the difference between alternative pricing and prime pricing, every month, for the rest of the amortization.
Real numbers
Private second cleared in 18 months
- Starting position
- First at 5.4% plus second at 11.5%
- Combined monthly cost
- $3,470
- Credit score at start / exit
- 561 / 688
- Combined LTV at start / exit
- 84% / 76%
- New prime mortgage
- $566,000 at 4.44%
- New monthly payment
- $2,810
About $660 a month saved, plus no more annual lender or renewal fees on the second.
B lender to prime at renewal
- B lender rate and fee
- 6.19% plus 1% each renewal
- Balance
- $410,000
- Renewal fee avoided
- $4,100
- Prime rate secured
- 4.39%
- Annual interest saved
- About $7,380
Two years of documented income and clean payment history were all that stood between these numbers.
Illustrative examples only. Your actual rate, payment and costs depend on your credit, income, property and the lender you qualify with.
FAQs
How long does it take to get back to an A lender?
Most files take 12 to 24 months. Credit rebuilds fastest, usually within a year. Self-employed income documentation is the slowest piece because it needs two filed tax years.
What credit score do I need for a prime lender?
Generally 680 for the best pricing, with some prime lenders considering 660. Below that you are looking at near-prime, and below roughly 600 you are usually in alternative or private territory.
Can I be in a consumer proposal and still get back to prime?
Yes, once the proposal is fully discharged and you have rebuilt two active trade lines with 12 to 24 months of clean history. Some prime lenders require two years from the discharge date.
Does the plan cost anything?
No. The gap analysis and quarterly reviews are free, whether or not I arranged your current mortgage.
What if my property value drops?
We adjust. That usually means directing more toward the principal, or holding one more short term with the alternative lender rather than forcing an exit at bad numbers.
Can you help if another broker set up my private mortgage?
Yes. I regularly take over files I did not originate. I need your current mortgage statements and the standard charge terms to build the plan.
What happens if I miss a target?
We find out at the quarterly review, not at renewal. There is usually time to correct one missed target. What sinks files is nobody looking until 30 days before the term ends.
Should I just renew the private mortgage instead?
Sometimes a second one-year term is the right call, for example when a renovation or sale is close. It should be a decision, though, not a default.