Getting a Bad Credit Mortgage in Lincoln
You can only be approved for a loan with bad credit in Canada by private lenders. Banks are governed by strict rules that unfortunately cause them to leave out people with poor credit ratings when checking loan applications. If you need a loan but were turned away by institutional lenders, look to us for we help people get bad credit mortgages in Lincoln.
Credit Scores Needed by Different Lenders
- Banks must see 600 points or more
- Trust companies need a score that is greater than 550
- Private lenders’ decision is not based on credit
Where to Check Your Credit Score?
The Canadian market is served by two credit bureaus; TransUnion and Equifax. Their role is to calculate each citizen’s score based on a pre-defined criterion. They gather information from lenders and other institutions to create a useful reference whenever they need to measure a client’s creditworthiness. It is always good to know what your credit score is and this can be done by checking relevant websites and requesting a copy. We also do credit reporting so don’t hesitate to ask us for a copy because it is free. You will notice a low score on the report if you recently faced a bankruptcy proposal, rarely repay debts owed or have a tendency of taking more than you can afford.
Bad Credit Lender Mortgages in Lincoln
If your score is at any point below 550, no one but a private lender can come to the rescue when you need a mortgage. The bad credit mortgage lenders serving Lincoln city can provide them without paying much attention to a borrower’s credit score. Two actions that could lead to rejection are consumer and bankruptcy proposals but that doesn’t deter private lenders from making an investment either. The private lenders in our contacts offer bad credit mortgages in Lincoln and most other cities in the Ontario province of Canada.
Criteria for Bad Credit Mortgage Approval
Unlike banks who consider credit to inform their decisions, private lenders are more interested in your property. They must ascertain that a property carries little debt otherwise, they risk a big loss. They are so sensitive to the risk that they would rather offer registered mortgages which allow them certain privileges. The mortgage act allows them to sell the property if a borrower fails to pay off. Once a property is sold, though, a private lender may not recoup before previous mortgages are paid off. Risk assessment of a property is done by calculating its value ratio in order to determine how much equity is left to the owner. LTV is obtained by dividing the total number of debts by current estimated selling price of similar homes in the city. The value must be below 85% and higher incomes can help you get better rates but like credit score, it is not mandatory.
Fees and Rates for Bad Credit Mortgages
In order to lessen the level of risk associated with this type of deal, bad credit lenders charge higher interest rates than other lenders. They will charge 7%-15% interest on mortgages when banks are only demanding about 3%-4% and even require you to pay the fees required to set up your mortgage. This means that legal, home appraisal and paperwork processing fees will be billed to you and not the lender in Lincoln. If you hope for a good deal even with bad credit ratings compare prices because rates differ depending on various factors. Thanks to our network of private lenders in Lincoln we can provide several quotes for bad credit mortgages.
Progressively Improving Your Credit Score
This is indeed possible but you have to remain committed to settling your bills and credit card debt. Making payments on time may speed up the process as will placing small amounts on a credit card to make monthly payments more affordable. The simplest way to mend a broken credit score is using a secured credit card.
Large banks in Canada have no problem issuing these cards but before getting one you must place a sum to be used when the unsettled payment is generated. Secured credit card best practices including staying within the 60% limit, and paying off all charges. Do this consistently and see your score increase in about 6 months