Did you know that just because you have a bad credit score doesn’t mean that you can’t get a mortgage? When your bank declines your mortgage application due to low credit score, you shouldn’t panic or get worried. Bad credit lenders offer bad credit mortgages, which are not only great for people with low credit score but also perfect for those without credit scores, and the ones who need to repair their credit scores. We help hundreds of clients like you find private lenders who provide bad credit mortgages in Ajax.
Credit Score Numbers Required By Different Lenders
- Major Canadian banks approves clients with credit scores ranging from 600-900
- Trust companies want to see credit scores of 550-700
- Private lenders serve everyone, but most of their clients have credit scores that are less than 600.
How To Check Your Credit Score
Most of us don’t check their credit reports, and can’t tell whether there are mistakes in their reports. It can be hard to determine why a credit application is denied or determine if someone is trying to steal their identity. It’s important to check your credit report to find answers to such questions. In Canada, credit scores are generated by Equifax and TransUnion which are national credit bureaus.
Every adult who has ever applied for a personal loan or credit card or borrowed money to buy a car or house has a credit file and can access them by visiting the official Equifax or TransUnion sites. You can also give us a call and let our brokerage experts pull and provide you with a copy of your credit score.
Private Lenders for Bad Credit Mortgages in Ajax
If you have a credit score that’s less than 550, it can be challenging to get a mortgage from the main banks and trust companies in Canada. Other factors include bankruptcy and consumer proposals. Private lenders can come to your rescue with bad credit mortgages since they offer their services to clients with any credit score and even to those without. We provide our clients with lists of private lenders who provide bad credit mortgages in Ajax and other cities in Ontario.
Requirements for Private Lender Mortgages
As you may already know, private lending is a risky business, and that’s the main reason why most private lenders do not provide mortgages when a property isn’t in good condition or if it has a high amount of existing debt. Therefore, the main requirement is always the Loan to Value (LTV) ratio of your property which is calculated by dividing the home’s mortgage value by its selling price. Private lenders in Ajax can provide bad credit mortgages for homes with LTV of up to 75%. Other factors such as good credit score and large income can help customers get better interest rates but aren’t considered when the mortgage is being approved or rejected.
Interest Rates and Fees for Bad Credit Mortgages
Bad credit mortgage interest rates range from 8% to 15% depending on the current economic conditions, borrower and property. The rates are higher, compared to the traditional bank rates which are valued at 3% to 4%. Moreover, customers have to pay additional fees that cover the mortgage set up costs, such as administrative, property appraisal and lawyer fees. However, these amounts can be financed through the mortgage loan.
We help you get the best bad credit mortgage in Ajax by sending you multiple quotes & information of different lenders. You’ll have the opportunity to compare the terms, mortgage interest rates and the reputation of each lender before you can select the one you prefer.
How To Repair Your Credit Score
To fix your credit score or resolve some bad credit history on your credit card report, there are several steps that you’ll have to take over a period of time. Despite the fact that the steps vary based on the damage you have done to your credit score, the most effective ones include the following;
- Request your credit reports every year so as to keep your credit in check.
- If you have no credit scores, get a credit card/ loans to build a credit history.
- Keep your credit card balances below 50% of your limit.
- Pay off all your debts completely. This includes phone, vehicle and utility bills.
- Get a secured credit card from your bank.
- Pay your credit cards/ loans on time. With consistent payments, your credit card score is likely to be increased within 6 months.