Banks only listen to credit requests from customers whose overall score is 600 or more points. They perceive it a risky move to extend mortgages to people with poor credit scores because it is not easy to get repaid. Besides strict government regulations, institutional lenders want to avoid legal tussles that are highly possible in the event of a default. It is not all doom and gloom for those with low scores though as bad credit lenders will certainly listen. Our job is to help our clients in this situation by getting them bad credit mortgages in East Gwillimbury.
Credit Scores Needed by Various Lenders
- As noted, banks need to see 600 points
- Credit unions will lend those at 550 points
- Private lenders are not concerned about credit
How to Check Your Score
Visit the official websites for TransUnion or Equifax to get a copy of your personal credit report. In it will be information about your repayment and borrowing habits including a score to show lenders what kind of borrower you are. Banks and other lenders can easily pull reports of various clients to inform the loan approval decision. If you want a free copy of the same, kindly reach out to us as we also do credit reporting. Bills must be paid in full and on time, you must never miss credit card debt payments or take up more debt than you can afford if you want to keep your score at desired high levels.
Bad Credit Mortgage Lenders in East Gwillimbury
If you discover a score below 550, then you know for sure that if that remains the case you have only private lenders to go to for mortgages. The bad credit lenders operating in the Gwillimbury market don’t really care about the state of credit and will lend to anyone who meets their special approval requirements. We have contact with several bad credit mortgage lenders in East Gwillimbury and other parts of Ontario to help.
Criteria for Bad Credit Mortgage Approval
It is already clear that credit score isn’t what private lenders look for in borrowers. They are more interested in equity considering that their main focus is in real estate. By looking at your debts in relation the current appraised selling price of a home, private lenders are able to evaluate your equity in it and if satisfactory, they will certainly lend you the money. For private bad credit mortgage lenders to work with you, the LTV must be below 75% and if you earn a good income, they could give better rates.
Fees and Rates for Bad Credit Mortgages
Banks charge appealing rates of 3%-4% on their mortgages but with private lenders interest rates rise to 7%-15%. This is understandable considering the risk associated with this group of borrowers. They also need one to cater to administrative, legal and paperwork processing fees needed to kick start the process of setting up your mortgage. All this is a private lender’s attempt to ensure that their money is never lost even if you are unable to finish repaying the debt. Private lenders in this city offer registered mortgages, which give them the power to sell if mortgage fees are not paid off but at the same time, private lenders can only get their cut if mortgage lenders who came before them are fully reimbursed. You need to compare prices offered by different lenders and thanks to us you can access as many of them in East Gwillimbury as you like.
Improving Your Credit Score One Step at a Time
People with poor credit must take active, deliberate steps to improve it. Paying off bills without delay is a great way to start but you must also take care of credit card debt. Use any credit card sparingly to make monthly payments affordable. A foolproof way of improving credit score is requesting your bank for a secured credit card.
The difference between regular and secured cards is that for you to get the latter a deposit must be put down. The amount will be sued to cover charges when an overdue payment is generated. You shouldn’t surpass the 60% limit and must pay off all charges for this card to work in your favor. If you are consistent with this approach then you score will certainly have improved in 6 months.