Banks need credit scores before making decisions on who to lend loans. Banks must see a score of 600 points while credit unions give loans to people with 550 points or more. People with low credit score can only turn to private lenders willing to provide loans at any score. We can help in your search as we already have many lenders of bad credit mortgages in Ingersoll.

Credit Scores Required by Different Lenders

  • Private lender do not need to see credit score
  • Banks need a score of 600 points
  • Credit unions must see 550 points

How to Check Your Credit Score

It is the job of credit bureaus to come up with a credit score for every citizen and in Canada; Equifax and Transunion do this job. You can visit their website to get guidance on how to get the score, which generally takes 3 weeks. You can also get a free copy from our brokerage as we also do credit reporting. Banks and credit unions are at liberty to view your credit score to inform their lending decisions.

Bad Credit Mortgage Lenders in Ingersoll

If you do not have the minimum score required by credit unions, only private lenders can help. These are individuals or companies who do not follow the same rules of mortgage approval as banks do. We know many bad credit mortgage lenders willing to overlook bankruptcy proposals, poor credit scores or consumer proposals that often hinder access to bank mortgages.

Approval Requirements for Bad Credit Mortgages

Since they do not consider credit, bad credit mortgage lenders serving in Ingersoll must assess the risk posed by the property you put up as security. They can do this by calculating LTV to help them know how much equity you own. Loan to value ratio is obtained by dividing the total value of mortgages by the current selling price of your home. Bad credit mortgage lenders in Ingersoll need a value not exceeding 75% to lend a mortgage. Despite their treatment of credit score, private lenders are very wary of risk and LTV beyond 75% is too much of a risk for any real estate professional. It means the borrower does not have enough equity to guarantee them compensation should the deal go sour. The mortgage signed by private lender gives the power to sell a property in default but not before other lenders have recouped.

Bad cCredit Mortgage Fees and Rates

To protect themselves from the high risk posed by people with poor credit scores, private lenders have to issue loans at higher interest rates. You will pay 7%-15% interest on a bad credit lender while banks offer the same to clients at 3%-4%. Banks enjoy the luxury of serving clients who are least likely to default but private lenders can only hope to recoup their investment before a borrower is unable to repay. Banks and credit unions are also very strict about your intentions for the money, as they need to see it used in a profitable manner. Private lenders will ask why you need the mortgage for record keeping purposes but they are very lenient. You can use the money for home renovations, tax payments, or education among other pressing financial issues. The only thing bad credit mortgage lenders want to see is a way they can recover their investment just in case you default.

How to Improve Your Credit Score

It takes some time to build a credit score, which is why many people are so disappointed upon the discovery that they scored so low. It is important to try rebuilding a poor credit score, as it is the only way you can go back to enjoying credit at low-interest rates. Start by repaying all debts owed and deliberately avoid the credit card unless it is unavoidable. Credit card debt should be paid on time to keep interest from accruing then becoming unaffordable.

If you want to speed up the process of repairing credit, ask your bank for a secured credit card. This usually has a deposit placed on it to secure any debts. You should always make payments on time but if you forget, the bank will just deduct the debt from your secured card. For this to work you should never exceed the 60% limit on this card. If you do this consistently, the credit score will improve in approximately 6 months.

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