Big Canadian banks require applicants to have a good credit score to get approved for a mortgage. Getting a mortgage with a credit score of less than 550 is not possible with Canadian banks. We connect our clients with private lenders who are able to give them bad credit mortgages in London.

Scores Needed By Different Types of Money Lenders

  • Banks in Canada need a credit score of 600 or more
  • Trust companies in Canada need a credit score of 550 or more
  • Private lenders do not need to see credit score to approve a mortgage

Getting a Credit Score Report

Banks and many other mortgage lenders can retrieve a copy of your credit scores that come from the Canadian credit bureaus Equifax and TransUnion. We are permitted to create copies of your credit score, and we can provide this to you free of charge. Alternatively, you can ask for a copy directly from Equifax and TransUnion by going to their respective websites. When you stop paying your bills, get overwhelmed with debt, or go through consumer proposal or bankruptcy, your credit score will suffer.

Bad Credit Mortgage Lenders in London

A credit score of less than 550 will mean that you will need to seek a private lender for a bad credit mortgage in London. Private lenders in London can provide a mortgage no matter how low your score might be. Banks automatically disqualify people for mortgages if they have done a consumer proposal or gone through bankruptcy. We’ve built up a large network of private lenders who are able to provide mortgages for residential properties in London.

Criteria for Bad Credit Mortgage Approvals

When approving a mortgage, private lenders will analyse the secured debts on a property and its selling price. Lenders will not lend on properties with extremely high amounts of existing debt. When the mortgage is registered the lender is legally able to sell the house if the mortgage payments are not made. By selling a property, a lender can take back their investment after paying off previous mortgages. To determine the risk of a potential mortgage, lenders will determine the Loan to Value ratio (LTV) of the property. LTV can be found by dividing the value of prior mortgages secured to a property by the selling price of the property. In London, lenders can lend on residential properties with an LTV of no greater than 80%. People with any income and credit score can be approved, but these factors may help to get a lower interest rate.

Understanding the Cost of a Bad Credit Mortgage

Bad credit mortgage lenders often charge higher interest rates than banks since they can lend on riskier deals. The majority of banks in Canada charge interest rates from 3% to 4% and the majority of private lenders charge rates from 7% to 15%. Private lenders also need to charge initial fees for administering the mortgage. Fees are to be paid to the lenders for administrative work, to the real estate lawyers, and to the property appraisal company. It is a good idea to get quotes from multiple private lenders before deciding who to use. Our company has built up a large number of lenders that operate in London and we provide clients with multiple offers to choose from.

Repairing Your Credit Score

To repair your credit score, it is required that you pay off your bills and credit cards in a timely fashion. By taking less debt you can reduce your monthly payments and make the payments more manageable. You need to be able to fully pay off all credit card fees in order to quickly repair your credit score. Placing small bills on credit card will make it easy to pay, or you can get a secured credit card from your local bank.

Every major Canadian bank will offer a secured credit card. There is an initial fee to get the card which is used as a deposit. The deposit is used to make payments if the card’s fees are left unpaid. If you stay under 60% of the card’s credit limit you can reduce the risk of not making payments. Your credit score will improve in six months if you pay all fees every month.

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