When going out in search of a mortgage bear in mind that banks require you to have a credit score of 600 points or greater. They do not negotiate with people below that level as this means they have poor credit habits that might make lending them mortgages a bad investment decision. People with poor credit scores can only rely on bad credit lenders. We help connect our clients with lenders that provide bad credit mortgages in Amherstburg and other cities in Ontario Canada.
Credit Scores Needed by Different Lenders
- Banks need to see a score of 600
- Trust companies work with credit score of 550 and above
- Private lenders do not rely on credit score to make a lending decision
How to Check Your Credit Score
TransUnion and Equifax calculate credit score are the main companies that calculate credit scores for people in Canada. These credit bureaus collect information on an individual’s credit habits and using different methods they calculate a score for lenders to rely upon. The higher the score, the more likely you are to get a bank mortgage but if it is on the lower end then private lenders are your best shot. To find out your score, visit any of the credit bureaus websites to request your credit report. Banks and other lenders can look into your report in order to decide the fate of your mortgage application. If you would like a free copy of the credit report, simply contact us as we also do credit reporting.
Bad Credit Lenders in Amherstburg
The bad credit mortgage lenders in this city do not look at credit score, bankruptcy, or consumer proposals when deciding who gets a loan. By doing this they give many people another shot at actualizing their dreams. You can use money from the mortgage to furnish your house, pay for tuition or medical bills but only if you can repay the fees.
Criteria for Bad Credit Mortgage Approval
Private lenders rely on LTV to decide whether it is necessary to loan money against certain properties. Loan to Value ratio is calculated by dividing the mortgages against a house with its current selling price. The ideal result is below 75%, which shows that the owner still has enough equity to warrant a profitable investment. A private lender will offer their clients a registered mortgage so that they can sell off the property if you are unable to repay. The catch is that mortgage lenders who went before must be repaid before a bad credit mortgage lender. People with relatively good credit often get a good deal with private lenders so make a point of comparing prices before making a commitment. Relatively good credit scores and high annual incomes contribute to good interest rates despite not being mandatory.
Fees and Rates for Bad Credit Mortgages
It might seem odd that private lenders charge 7%-15% interest on bad credit mortgages but that is only because they lend to a high-risk category of borrowers. The chances of defaulting are too high that these creditors charge high rates in an attempt at recouping their investment in the shortest time. To further reduce costs, private lenders require approved borrowers to pay administrative fees, legal fees and other charges needed to start the mortgage process. To make finding a reliable bad credit lender even easier we can send you multiple quotes from our contacts in Amherstburg.
How to Improve Your Credit Score
Consistently paying off debts is the only way to ensure a steady increase in credit score. Credit card debt must also be paid in full and to avoid problems, learn to make only small, affordable charges to them. A simpler way of improving credit is asking for a secured credit card that will protect you in times when it is difficult to repay. Because you have to place a deposit on the card, your loan will be covered the moment overdue payments are generated. This is indeed a great way to stabilize and improve your credit score but always stay within the 60% limit and remember to repay on time. Credit assessment is a lengthy process so you do not expect the score to increase immediately. Six months is the normal time it takes to have a bad credit score improve.