Institutional lenders need credit scores before making a decision on loans. The minimum score by credit unions and banks is 550 points but very few people qualify. The rest are left to private lenders offering bad credit mortgages in Huntsville. We can help you find them as we are connected to many bad credit mortgage lenders in the city.
Credit Score Numbers Required by Different Lenders
- Canadian credit unions need 550 points or more to approve a mortgage
- Banks must see 600 or more
- Private lenders focus isn’t the credit score
How to Verify Your Credit Score
The major credit reference bureaus in Canada are Equifax and Transunion. Banks are free to pull your credit score to inform their decision when approving loans. Our mortgage brokerage can also provide you with a copy and if you want, reach the credit reference bureaus’ websites to request your personal copy. People with a habit of never paying their bills on time or paying back loans obviously have a bad credit score which is not acceptable by lenders. Credit reporting is an important function that gives lenders an insight into borrowers before deciding on who is eligible. Without credit reference bureaus banks and other lenders would have to hope that their clients honor debts and it is obvious that credit habits are not the same. Citizens have a duty to find out their credit scores, which are regularly updated to reflect the most current information.
Private Lenders Offering Bad Credit Mortgages in Huntsville
If your credit report reveals a poor credit score that is below banks’ minimum requirement, fret not as you have private lenders who can help. Huntsville bad credit mortgage lenders can lend to any client regardless their credit score. Bankruptcy and consumer proposals also cause banks to reject applications but it does not deter private investors. We have a contact list full of such lenders ready to give bad credit mortgages for people in Huntsville and other parts of Ontario.
Requirements for Bad Credit Lender Mortgages
The debts on a property are a private lender’s main concern. Banks care so much about credit score but for these lenders, equity in the property is the key. Lenders generally avoid houses with too much debt as it means there is too little equity left for the owner. A mortgage agreement signed by private lenders allows them to auction a property in the event that mortgage fees are not cleared on time. To evaluate how much of the home you own the lender will ask to see all other mortgages. They will divide total debts owed by the current appraised selling price of the house to get LTV. This should be below 75% for a private lender mortgage request in Huntsville to be approved. It is possible to negotiate better terms with a high annual income and relatively good credit score but this is not a mandatory requirement by private lenders.
Rates and Fees for Bad Credit Mortgages
Private lenders price their bad credit mortgages at 7%-15% interest to reduce the risk associated with their preferred clients. They will also charge mortgage set up fees including; legal, home appraisal and administrative fees, which can turn out to be very expensive for the client. Banks offer mortgages at 3%-4% interest rates but without a high credit score, you cannot qualify. It is important to compare rates offered by different lenders if you want to get the most appropriate mortgage. We know many private lenders that offer such mortgages. We can send multiple quotes to our clients in need of bad credit mortgages in Huntsville.
How to Improve a Poor Credit Score
There are countless things that could cause a decline in your credit score, but it can be repaired no matter how low the number. Make a choice to repay your debts in time and you will certainly be better placed after the next update. Credit cards should be used wisely so that monthly repayments are more affordable. If you want a better way, try secured credit cards. Banks require you to place a deposit to be used as security for your debt in case you forget. For the secured card to help your credit score never exceed its 60% limit and pay off any charges on it. Do this religiously to see your credit score increase in 6 months.