Canadian Banks require a high credit score to qualify for a mortgage. They need to see a credit score of less than 550 for approval of a fast mortgage application. Those with a bad credit score cannot qualify for the top lenders, so they must find a private mortgage lender. Our staff team helps our clients apply for bad credit mortgages in Georgina.
Scores Required by Different Lenders
- To qualify for a bank mortgage, you must have a credit score of 600 or more
- Most trust companies want you to have a 550 credit score or more
- Private do not look at credit scores to approve your mortgage
How to Check Your Credit Score
TransUnion and Equifax are the only two bureaus that process credit scores for people in Canada. Banks and other financial institutions depend on them to get your credit score. We can provide a copy of a credit score report for our customers without any charges. You can also go online on either of the two companies’ websites and request your credit score. Credit score falls, especially when someone accumulates too much debt, doesn’t pay his or her bills or goes into bankruptcy.
Private Lenders for Bad Credit Mortgages in Georgina
When you get your credit score and find that it is below 550, you will need to turn to private bad credit mortgage lenders. Our bad credit lenders in Georgina provide mortgages for people with any credit score. Consumer proposals and bankruptcy will not allow a person to get approved for a mortgage from a bank or trust company. We have a large network of private lenders in Georgina who provide bad credit mortgages to our clients.
Requirements for Private Lender Mortgages
Private bad credit mortgage lenders do not look at credit scores to weigh if someone qualifies for a mortgage. They look at the accumulated debts on your property and the current value of the property. Private bad credit mortgage lenders are very sensitive and will refuse to give you a mortgage if the debts your property has accumulated are too much.
To ensure that they are safe, private lenders register your property against their mortgage so that they can sell it if your mortgage goes into arrears. They calculate the Loan-to-Value (LTV) of your property to determine the risk involved. The LTV is usually determined by dividing the selling price of the property by the value of the existing mortgage. The network of lenders we have in Georgina can provide mortgages to people with bad credit for all homes if the LTV is no more than 80%. A good credit score and a large income can help you get a fair interest rate, but this does not determine your mortgage approval.
Interest Rates and Fees for Bad Credit Mortgages
Due to the risks involved with bad credit mortgages, private lenders tend to charge higher interest than banks. Private lenders can charge an interest rate of about seven to eight percent, while banks charge interest within a range of two point seven to four percent. Private lenders who offer mortgages also charge an extra fee for mortgage setup. There is also a fee for administrative work, lawyers for legal work, and a fee for a home appraisal. When accessing a mortgage, comparing different lenders’ deals is always paramount. Our private bad credit mortgages can provide their services within Georgina and in the rest of Ontario, Canada.
How to Repair Your Credit Score
Paying bills and credit cards is the key to improving your credit score. Being timely with your payments will help alleviate your credit score within a short time. While paying bills using credit cards, you have a better chance of improving your credit score. The only proof of improving your credit score in Canada is by applying for a secured credit card at a bank.
Secured credit cards are issued by all big banks, and they are easy to get. In order for the card to be processed, you are supposed to pay the outstanding debts on the card. Ensure you use less than 60% of your card limit and always make timely payments. You will find that your credit score will increase with consistent credit card payments.