Banks base their lending decisions on an individual’s credit status but while this saves them time and losses, it locks out many deserving people. To fill in the gap are private lenders willing to overlook credit score instead of relying on other criteria for approving mortgages. We have a network of such lenders providing bad credit mortgages in Essex and other cities in Ontario, Canada.

Credit Scores Needed by Different Lenders 

  • Banks must see a score of 600 or higher
  • Trust unions would like to see 550 points on your credit report
  • Private lenders are not guided by credit score

How to Check Your Credit Score

A credit score is a measure of credit worth usually calculated by credit bureaus in Canada. Everyone has a duty to request their credit reports from them in order to know where they stand with creditors. Banks and institutional lenders can access any client’s credit information as it helps them in avoiding risky investments. You can also contact us for a free copy of personal credit reports as we also do credit reporting.

Bad Credit Lenders in Essex

People with a bad credit score due to bankruptcy or consumer proposals should turn to private lenders. Their bad credit lender mortgages provide borrowers another shot at a better financial future, utilizing assets they already own. While they may want to know your reasons for getting the loan bad, credit lenders are willing to accept any explanation. This is money tied up in your property and you have the right to access it and fund a business, pay for a vacation or home renovations even with bad credit. The only thing required is full repayment of the loan plus interest on time.

Criteria for Bad Credit Mortgage Approval

Rather than ask for your credit score, private lenders will ask you to have the property appraised then weigh this against total debts. They do this to obtain LTV of a home so that they can tell whether you are a worthy investment. Being in the real estate sector, private lenders must protect themselves by refusing requests of people whose equity in a property is below 15%. A private lender trying to avoid risky investments never provides loans to a property with more than 75% LTV.

Fees and Rates

7%-15% might seem oddly high but bad credit mortgage lenders say that it is a way of compensating for the possible loss. If a client defaults, the lender has a right to sell off a property and claim their investment but that is not always easy. If a private lender gives out a mortgage against property with too high LTV there might be nothing left for them after other lenders who came before have been compensated. In addition to high rates, private lenders offering bad credit mortgages in Essex expect a client to pay the lawyers, home appraisers and other experts needed during the mortgage processing. If you have a high income and a relatively good credit score then you can negotiate better rates with the lenders. We have many of them in our network and if you are our client then we can send over many quotes to help you choose the best bad credit mortgage offer in the city.

How to Improve Your Credit Score

There are many kinds of debt including monthly bills, credit cards, and mortgages. Repay these and other debts on time to improve your credit score. In order to help others in the market, lenders report on customers to the credit reference bureaus. Even the most lenient bad credit mortgage lender will avoid a serial lender. They are so sensitive to risk; they will not provide mortgages where there is little or no value in the property.

Try a secured credit card that has an amount that acts as insurance for your debt. As long as you stay within this card’s limit of 60% this deposit will cover your debt immediately overdue payments are released. If you stay committed to it, improving your credit score will only take 6 months. Reaching the most desired levels of 500 points might take longer than that but once you get started, honoring debts and paying bills in time becomes an easy task.

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