A credit score is an important number for creditors and borrowers alike. This score is obtained using a special formula that converts information on credit report into three digits that inform a lender’s ultimate decision. If your credit score does not meet a lender’s minimum requirement, your mortgage request will be rejected and unfortunately, many people in Canada often find themselves in such situations. People with poor credit scores can only hope to get bad credit mortgages in Pelham from private lenders. We have a network of the best bad credit lenders in Pelham who do not give much thought to your credit score when disbursing mortgages.
Credit Scores Needed by Different Lenders in Canada
You can request a current credit score from the leading bureaus in Canada; Transunion and Equifax. This is to ensure that your creditors provide the reference organization with accurate information about you to ensure a fair score. If you often delay payments, default on loans, or ask for more than you can repay, the credit score is likely to very low. Banks and institutional lenders are at liberty to access your credit score as it is their most important criterion in the entire mortgage approval process.
When you receive a copy showing a credit score less than 550 points, only bad credit lenders can help get you a mortgage. They are usually private entities without a care about bad credit because their main business is in real estate. Our large network of bad credit mortgage lenders in Pelham will provide useful loans without asking about the credit report, bankruptcy, or consumer proposals because they have other methods of measuring risk.
Private lenders are more interested by the debts on a property than anything else is. This is because their business is real estate upon which they must ensure a maximum gain. The prospects of making big money from selling properties in default dwindle as debts increase, which is why private lenders avoid them. For an accurate risk assessment, private lenders in Pelham must calculate the loan to value ratio of your home. They will only lend if this amount is below 85% as anything less carries an unbearable risk. The LTV of a property is calculated by dividing the total mortgages by its current selling price. People with high incomes and average credit score can get better rates even if these are not mandatory. We have access to many private bad credit mortgage lenders in Pelham who can help you get the money needed to improve your life.
Private lenders of bad credit mortgages in Pelham charge more interest than banks in an attempt to regain their investment as fast as possible. Bad credit borrowers have a tendency to default and by charging 7%-15%, they are able to get back as much of their money before that happens. By providing a registered mortgage private lenders are also able to recoup some of their investments but that is only if there is enough left after paying other lenders who went before. In another attempt at protecting themselves, private lenders leave legal, administrative, and home appraisal fees to the mortgage applicant. It is important to compare rates to get the best deals from private lenders and thankfully, we have many like them in our private bad credit mortgage lenders’ network in Pelham, Ontario.
It takes quite a while to repair a bad score but it is certainly possible if you make a point of repaying your debts on time, and as per agreed on terms. Credit cards are the most common type of debt that could also be used to improve credit score. Charging small purchases to a credit card makes monthly fees more affordable. You could also get a secured credit card, which will help you avoid a negative score by catering to overdue payments generated. You have to make payments and avoid using more than the 60% limit on a secured card. Do this and earn yourself a good credit score in 6 months so you can stand a chance for better interest rates on loans.