It is important to have a positive credit score if you hope to get a mortgage in any of Ontario’s cities. This score is a calculation based on your credit report and it mainly acts as a guide for lenders. Banks and credit unions will not negotiate loans with low score individuals but we have a network of private lenders who can. These are companies or individuals whose lending decisions are not guided by the clients’ credit. We can connect you with many lenders providing bad credit mortgages in Wasaga Beach and other parts of Ontario.
Credit Scores Needed by Different Lenders
The organizations in charge of your credit score in Canada are Equifax and Transunion both of whom use different methods to calculate. The formula is a secret but by visiting any of the credit bureaus websites, you will be able to know your score. You will need to provide two copies of identification and some background information for the report to arrive after three weeks. You can pay a fee to speed this up or simply contact us for a free copy without having to wait. Make sure that there are no errors in the report as it could lead to a low score. Banks and other creditors can easily pull your report from the bureaus to gather information on their clients in the city. Some of the reasons you may get a low score are non-payments, late payment, and bankruptcy but private lenders do not care about that.
If your credit score is below 550 points and there are no errors in your report, only private lenders can offer you bad credit mortgages in Wasaga Beach. These lenders are not deterred by bankruptcy, consumer proposals, or the low credit score that makes institutional lenders turn down any borrower with poor credit.
In spite of their indifference towards credit, private lenders use a certain set of rules to approve or reject loan requests. They must first assess the LTV of property presented to make sure that the borrower still owns a portion of it. Without enough equity, private lenders will reject your request as it means they might not recoup if you default on the mortgage. Loan to value ratio is obtained by dividing the total value of mortgages by the current selling price of similar homes in the region. The result of this should be nothing short of 85% for a lender to consider the request for bad credit mortgages in Wasaga Beach. We have many private lenders in our networks and could help you by sending over several quotes so you can compare.
You will pay anything from 7%-15% on a bad credit lender mortgage because of the risk posed in such an investment. Banks can afford to charge low rates of 3-4% but that is only because they only give to clients with low risk of defaulting according to their credit score. In a further bid to protect themselves, private lenders also, expect their clients to pay the legal, administrative and home appraisal charges in order to complete the mortgage process. If a borrower defaults, private lenders can sell off a property according to the mortgage agreement. They can only be paid after all other mortgage holders have been compensated. It is possible to get better rates with a relatively good credit score and high annual income even if bad credit mortgage lenders in Wasaga Beach do not demand it.
This can be done by changing your credit habits. Paying loans on time, writing good checks, honoring your loans and paying off all credit card debt will play a big part in giving you a good score. If you want to speed things up, request your bank for a secured credit card. You have to put down a deposit o this, which will be used to pay your debt as soon as overdue payments are generated. This will reflect well on your credit report thereby giving you a good shot at improving your credit score in as few as 6 months.