Banks in Canada follow a rigorous time-consuming process when assessing mortgage applications. They demand that one has a minimum of 600 credit points if they hope for a positive response. Those who fall below this minimum must look for alternative lenders. People can rely on our staff to help them acquire bad credit mortgages in Aurora from private lenders in our network.
Credit scores required by different lenders
Institutional lenders are permitted to pull their customers’ credit reports from the leading credit bureaus-Equifax and the TransUnion. Individuals can visit relevant websites get their copy but if you want it free we can always help you out. Many people have a poor score because of failure to repay loans or bankruptcy among other issues. Lenders report to credit bureaus so that other might have a reference for assessing just how much risk a single borrower poses. While this is vital in some sectors, players in the mortgage sector believe that it should not prevent people from accessing credit. They lay more importance on equity as it shows whether they stand a chance to make profits in the event of non-payment.
People with below 550 points cannot be approved so they must turn to lenders offering bad credit mortgages in Aurora. Our network of private lenders in this city do not reach a decision based on credit score, allowing bankrupt and those faced with consumer proposals to get much-needed loans. These lenders are not keen on how the mortgage so you can use it for renovations, school fees or other personal matters. Bad credit mortgage lenders allow people to access equity tied up on the property so that they can use it to reach their dreams.
To approve or deny a mortgage, private lenders must calculate how much equity you own. This is done by dividing debts by the selling price to get its loan to value ratio. If the LTV is above 85% your loan request will most likely be denied. This is because private lenders are only interested in a property that they can sell for a profit if the borrower is unable to honor the debt. Those with relatively good credit might get better interest from private lenders but that is not a requirement for bad credit mortgages.
Banks charge 2.7-4% interest on mortgages but those seem to skyrocket when it comes to private lenders. Lending to people with bad credit is high-risk because of the likelihood that they will default. They charge legal, appraisal and other charges to set up the mortgage as an attempt to reduce the chances of loss if you are unable to pay off the loan. Prices differ marginally depending on the bad credit mortgage lender in Aurora but it never hurts to look around for best terms. Besides Aurora, our lender network also serves other parts of the country.
Credit cards are the most commonly used form of credit that used effectively could help improve one’s credit score. Consistently paying off your credit card debt boosts the score over time but you can do more. According to the experts, it is wise to charge small payments so that it is easy to repay. Alternatively, you could use a secured credit card to prevent you from spending more than you can repay. When you approach your bank for this card, they will you to make a deposit as security. This is to say that when time comes to repay credit card debt, the bank can deduct that amount from the deposit you made. To make it work though you should avoid surpassing the 60% limit. If you take these actions and remain consistent then your credit score will definitely increase within a period of six months. However low your credit rating may be, consider building it gradually by taking out bad credit mortgages from private lenders. They may be willing to overlook low scores but they also report to credit bureaus so be consistent and prompt with payment.