A mortgage agent is assisting Sarah, a self-employed borrower in Calgary, with a credit score of 590. She owns a detached home valued at $650,000 with an existing first mortgage of $300,000. Sarah needs an additional $150,000 to cover unexpected business expenses and has been declined by A lenders due to her credit score and irregular income. Which of the following lending options is most suitable for Sarah's situation?

Question: A mortgage agent is assisting Sarah, a self-employed borrower in Calgary, with a credit score of 590. She owns a detached home valued at $650,000 with an existing first mortgage of $300,000. Sarah needs an additional $150,000 to cover unexpected business expenses and has been declined by A lenders due to her credit score and irregular income. Which of the following lending options is most suitable for Sarah's situation?

Answer options: ✅ A second mortgage from a B-lender.

• A collateral mortgage from a prime lender.
• A home equity line of credit (HELOC) from a major bank.
• A conventional first mortgage from a credit union.

Correct answer: A second mortgage from a B-lender.

Explanation: Given Sarah's credit score and self-employment income challenges, a B-lender is the most suitable option as they are more flexible with underwriting criteria compared to A lenders, and a second mortgage allows her to access equity without disturbing her existing first mortgage.