All Canadian banks and institutional lenders have strict credit scores that they use to determine if someone qualifies for a mortgage. Most banks require people to have a credit score of 550 or better in order to qualify for a mortgage. People who do not have a good credit score do not qualify for bank mortgages and they must find a bad credit lender. We help people who have bad credit in Brantford to find private lenders who provide bad credit mortgages in Brantford.
Scores Required by Different Lenders
In Canada, credit scores are generated by two credit bureaus TransUnion and Equifax. Banks ask for your credit score from the two mentioned Canada’s top credit bureaus. Our team also offers a copy of credit report for free, or you can access the websites of the two bureaus and ask for a copy of your credit score. If you have a bad history of paying bills or if you have been bankruptcy or you take too much debt without paying your credit score will be poor.
When you get a copy of your credit score and you find it is less than 550, you can only get bad credit mortgages from private lenders. The private lenders in Brantford can provide mortgages even if you have a bad credit score. You should know that when your consumer proposals and bankruptcy can also affect your bank mortgages legibility. We have a large network of private lenders in Brantford and other cities in Ontario.
Private lenders do not use credit score to decide whether someone qualifies for a mortgage. These lenders consider the existing mortgages on the property and they do not give a mortgage if your property has too much debt. Most lenders register a mortgage against your property, which gives them the power to sell the property in case the mortgage goes into arrears. To determine the risk that is involved, lenders calculate the Loan to Value “LTV” of a property. This is done by taking the current value of the existing mortgages and dividing it with the property estimated selling price. Our lenders in Brantford can offer bad credit mortgages for all homes with an LTV up to 80%. A good credit score or large income can assist in getting better interest rates, but they do not impact approval rates.
Bad credit mortgage lenders charge higher rates than banks so that they can compensate for the high-risk level in the investment. Private lenders charge a rate of 7% to 15% while traditional bank lenders charge a rate of around 3% to 4%. They also require fees to be paid for setting the mortgage up. A fee must be paid for property appraisal as well as fees associated with lender administrative duties and their lawyers. To get a good deal, it is worthwhile to contact a number of bad credit mortgage lenders. We know a lot of lenders who service in Brantford and we send clients multiple quotes from various lenders.
To raise your credit score pay your credit cards and bills in full and on time. Your credit score will increase faster if you be timely with payments. Credit scores are very useful because they can help you to pay bills and improve your credit score. When you charge small amounts each month you make it even easier. To improve your credit score even faster, consider getting a secured credit card from a Canadian bank.
Every bank in Canada will give you a secured credit card. Before you are issued the card, you will be required to pay a deposit for cases when fees are left unpaid. It is good to pay charges and not to exceed sixty percent of the credit limit. If you start being consistent with payments, your credit score will improve gradually within six months.