Banks can only approve mortgages for residents with more than 600 points on their credit score. This acts as proof that you consistently pay your bills and debts meaning that a mortgage will not be a problem to settle. Banks and credit unions are more comfortable working with good credit ratings but that leaves out many people who wish for mortgage loans. These individuals are left to private lenders and we have a wide lender network who are ready to provide bad credit mortgages in Brant.
Credit Scores Required by Different Lenders
It is the work of credit reference bureaus to create a credit report based on information they get from lenders and other players in the financial sector. In Canada TransUnion and Equifax are the main organizations tasked with the role of credit reporting. Upon receiving the information they calculate a credit score that defines one’s credit behavior. Serial defaulters, those who rarely pay their bills and are faced with consumer proposals have poor credit ratings which cannot attract banks and credit union mortgages.
Brant bad credit lenders are not concerned with credit scores, bankruptcy or credit proposals. They decide who qualifies for a mortgage by assessing other factors that to ensure that they profit from the property in question. We work with a team of such lenders who can make mortgage products available for those who miss bank loans owing to bad credit.
To decide on which client with bad credit deserves a loan, private lenders must calculate loan to value of their property. This is done by dividing debts by the most recent selling price of similar property in the city. A home whose estimated price is one million dollars will have 85% LTV if its loans are at $850,000. In this case, a private lender might approve the loan but anything more means that there is too much a risk in doing business with you. The mortgage act allows private lenders to sell the property if a borrower defaults but they can only regain their investment if mortgages that came before are fully paid off. In the case of a home with LTV above 85%, private lenders may not have a chance at recovering in case of default which is why they are unlikely to approve. You might be able to negotiate good interests if you have a job and relatively good credit score but those aren’t a private lender’s concerns.
Banks charge only 3%-4% interest on mortgages but their services are limited to people with good credit scores. Private lenders who have to reduce risk must charge high rates between 8 % and 15% in addition to administrative fees required to set up your mortgage. Private lender rates might be scary but if you look hard enough, it is likely that you will find one offering bad credit mortgages at affordable prices. To help you out we have a large network of private lenders in Brant and will send you several quotes so you can choose the most appropriate.
It takes a while to improve poor credit score but if you never give up it is possible to get to desired levels by banks and credit unions. Try paying off credit card debt on time and making only small purchases using it so that you are able to repay despite high credit card interest rates. For your credit score to increase you must also make sure that all your bills are paid on or before time. A foolproof way of protecting your score is using a secured credit card issued by all leading banks in Canada. To get one you must make a deposit that the bank can deduct from if you miss a payment. It is important to pay off this debt before the deadline and avoid surpassing the 60% limit to make sure that there is enough money on the secured credit card to cover your purchases plus interest. If this is done consistently, creditors will give a good account to the credit bureaus ensuring that your score does indeed improve after 6 months.