Banks and other lenders service people that meet their particular credit score requirements. People that have credit scores of less than 550 will not be able to get a bank mortgage and will have to get a bad credit mortgage. If your credit is poor, we can help you find a private lender that provides bad credit mortgages in Brampton.
Credit Score Requirements for Different Lenders
- The banks in Canada require a credit score of 600 or more
- Canadian trust companies want a credit Score of 550 or more
- Private lenders in Brampton can approve you regardless of credit score
Checking Your Credit Score
Banks and lenders can see your credit score which are given to them by the credit bureaus Equifax and TransUnion. Our team can give you a copy of your credit score, or you can order it via the websites of these credit bureaus. Failure to pay bills, bankruptcy or being overwhelmed with debt in general will all have a negative impact on your credit score.
Private Lenders for Brampton Bad Credit Mortgages
If you’ve confirmed your credit score to be less than 550 and are looking for a mortgage, you need the services of a bad credit lender in Brampton. Lenders for bad credit in Brampton are people who can provide mortgages no matter what the credit score may be. Bankruptcy and consumer proposals will also hurt credit scores and disqualify you for bank mortgages. Our bad credit lender network has been able to provide many mortgages for people living in Brampton
Bad Credit Lender Approval Criteria
Private lenders will examine the equity in a property rather than credit in order to approve a mortgage. Bad credit mortgages are considered risky investments, and private lenders take precautions to reduce their risk. Private lenders will create a registered mortgage which permits them to sell a property if the mortgage goes into default. By selling a property, a private lender can reclaim their investment after all prior mortgages are paid. To measure the risk of a property the lender will calculate that property’s Loan to Value ratio. The LTV of a property is calculated by dividing the existing debts by the selling price of the property. Bad credit lenders in Brampton can lend on properties that are at a LTV of 80% or less. To get a better interest rate having a higher income and credit score may help, however these are not required for mortgage approval.
Bad Credit Mortgage Rates and Fees
Bad credit mortgages are riskier and have higher interest rates than traditional mortgages. A traditional bank mortgage might have an interest rate of 3%-4% while a bad credit mortgage might have a rate of 7%-15%. When initially setting up a bad credit mortgage, additional fees must be paid to the people involved. Fees must be paid to the lawyers, the real estate appraisers, and the mortgage lender for administrative work. We usually recommend contacting many different lenders in order to compare mortgage terms. Our mortgage brokers are connected with many Brampton bad credit lenders and we can contact them on your behalf.
Repairing Your Credit Score
When you pay off bills and credit cards your credit rating will go up. To improve your credit score you need to be in a situation where you can easily pay off your debts. A good way to quickly improve credit scores is to get a credit card and pay off all the monthly charges. Putting only small charges on a credit card will make it easy to pay, or you can request a secured credit card from a bank.
All major Canadian banks offer secured credit cards. In order to get one, you need to pay an initial deposit that is used for any fees which are left unpaid. It is a good idea to not go over 60% of the card’s credit limit and always try to pay it off fully. It usually takes at least 6 months to improve your credit score.