The ABC explanation document is typically used to clarify the most basic principles or procedures of a certain matter. Before I became a loan consultant, I was unaware that home loans were indeed categorized as A, B, and C. Today, let me briefly discuss this 
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A: Traditional loans, applicable to: individuals with high credit scores, stable long-term employment, self-employed individuals with high reported income, and landlords with high rental income.Income proof: Employer letter (LOE), pay stubs,T4,T4A, T5,T1,NOA. In summary, the bank’s risk is low, and the interest rate is the lowest. No additional fees.
B: Semi-traditional loans, applicable to: small business owners with low reported income or individuals with damaged credit scores. The lender’s risk is slightly higher, and naturally, the interest is also slightly higher. The lender and loan broker charge some fees. Overall, it is worth spending a little money to achieve significant results.
C: Non-traditional loans (the so-called private loans), applicable to: individuals who own real estate and urgently need funds for turnover, and can afford high-interest monthly payments. The lender’s risk is very high; if repayments are not received, the only option is to seize the property. The interest is, of course, higher. The fees charged by the lender and loan broker will also increase.
In recent years, due to rising interest rates, the requirements for income proof for A-class loans have gradually tightened, leading to an unprecedented increase in demand for B-class and C-class loans. Today, I will mainly discussB class loans.
For borrowers who reflect large tax deductions in their financial statements but still possess strong repayment capabilities, B-class loans are an excellent choice for self-employed individuals and those whose main income comes from commissions— due to their operational sustainability, sufficient overall income, and robust cash position.
The humanized income proof conditions are key. You only need to provide twelve months of bank statements to prove stable income. It is important to note that cash income should also be deposited into the account in a timely manner, and receipts or invoices should be issued for accounting.The loan broker needs to do a lot of preparatory work before submitting the application, analyzing every income and expense, and explaining to the lender the reasons why the borrower has sufficient repayment ability.
Additionally, if your credit score is not lower than 600, the loan will be easier to approve. The higher the score, the more benefits you receive. For example, the maximum loan amount can reach up to80% of the property value, along with more favorable interest rates.
If your credit score has been damaged for various reasons, B-class loans are also the best short-term solution. Lenders have various plans to help borrowers get approved for loans, giving you time to quickly rebuild your credit, and the loan broker can then convert you toA class loans, reducing monthly payments.
If you are self-employed and have low reported income, it does not mean you cannot get a loan. For plans regarding home purchases, financing, or property for your children, please contact me to devise the best plan for you.