People wonder if they’ll ever be able to get financing for a home with bad credit. The short answer is they can buy a home using alternative lenders who supply bad credit mortgages in Barrie. People whose credit ratings have taken a turn for the worse can apply. Read on to learn everything you need to know about how these financial tools work.
If you want to get a mortgage through a traditional source like a bank or credit union, your credit score needs to be decent. Equifax is one of the credit agencies that work with these important numbers in Canada. They suggest a credit score below 660 is less likely to qualify you for a loan through a traditional institution.
Even if you have a bad credit score, real estate in Barrie is a good investment.
Real Estate Trends in Barrie
Current Barrie MLS® stats as of August 2023 peg the average house price at $761,444. The median number of days on the market for a home in this area is 25, and there have been 763 new listings in the last 28 days.
The numbers above indicate a monthly drop of 3.4% but a yearly boost of 2.5%.
Barrie is a southern Ontario city located on Kempenfelt Bay. It has a great strategic location being close to both the greater Toronto area and the Muskoka Region.
There are several excellent neighbourhoods to choose from, including Painswick and City Centre. That means there are good financial and social reasons to consider bad credit mortgages in Barrie.
The proximity to Toronto and the stable economic conditions of Barrie make it an attractive place for private mortgage lenders to do business.
How Do I Qualify with a Bad Credit Score?
Private lenders who supply bad credit mortgages in Barrie use criteria that go beyond the credit scores that banks rely on. Here’s a checklist of what they use to approve an application. Keep in mind here that the criteria that are used through private lenders are less restrictive:
- Income. The private lender will include other sources of income beyond the base salary. These calculations can include income from investments and even child tax credits. Self-employed income is also included.
- The Location of The Property. Lenders prefer to supply bad credit mortgages in bigger cities. They need to consider there’s a bigger risk with this type of financial tool. A home or condo in a downtown location can sell faster than one in a rural area.
- All The Financial Assets Involved. These assets can include RRSPs, stock portfolios and other real estate. In certain cases, these other assets can be considered as collateral for private mortgage loans.
- The Loan to Value ratio (LTV) is another benchmark that gets used. Private lenders usually allocate up to 75% of the LTV of any property. So, a property worth $1,000,000 can get a private mortgage for up to $750,000.
You can qualify for a bad credit mortgage in Barrie. However, it’s always a good idea to work to improve your credit score and your financial situation.
How to Improve Your Credit Score
It doesn’t matter what your credit situation is, there’s some things that you can do to improve your score.
Here’s some tips on how to rebuild your credit:
- Keeping old accounts open can help you improve your numbers. Even if they’ve been paid off, these accounts help to maintain your credit history.
- Paying on time is another excellent way to improve your credit score. Payment history makes up a big part of this number. Setting up alerts can help you to stay on track.
- Equifax also recommends that you keep your credit utilization numbers low. That means you should keep your spending in line. Another good way to improve your credit score is to ask a credit card company for a limit increase.
- One of the best suggestions is to review your credit reports on a regular basis. The first step is to make sure there are no inaccuracies and/or signs of fraud and identity theft. Next, check to see if you have any accounts that have gone to collections or unpaid balances. Start by paying off as many of the old outstanding debts as possible.
Some people face another type of problem. They only have a brief credit history with a few accounts. Establishing a longer credit background is the first step to improving your score.
One of the first steps you can take if you’re in that situation is to get a secured credit card. These are specifically designed to help people build a credit history. They require a deposit usually the same amount as the credit limit. After that, these act just like any other credit card. The more on-time payments you make, the better your credit history gets, and your score improves.
Utilities on Credit Reports
If you’re renting, you can ask your landlord to report your rent and utility payments to the consumer reporting agencies. These types of payments don’t always appear on credit reports. However, it’s possible to ask to have them considered when you’re looking for a loan.
The time it will take to improve your credit score depends on a few factors. Late payments can remain on your report for up to 7 years, and Chapter 7 bankruptcy, which is more serious, can remain for up to a decade.
Remember, bad credit mortgages in Barrie are available even if you’ve got a low credit score. Among the advantages of this type of loan is the fact that there’s a fast turnaround time. Private lenders don’t rely on your credit score to approve these transactions.
Contact Mortgage Broker Store for Tailored Solutions
If you find yourself facing challenges with traditional mortgage options due to a less-than-ideal credit score, Mortgage Broker Store is here to assist you. Specializing in alternative mortgage solutions, our dedicated team of brokers and licensed mortgage agents can guide you through the entire process. Whether it’s preparing you for a loan, advising on improving your credit score or connecting you with the right private lender, we have the expertise to help you achieve your home financing goals in Barrie.
We understand that every financial situation is unique, so we tailor our services to meet your needs. Don’t let a poor credit score keep you from securing a mortgage. Contact us today for fast, efficient, and personalized service.