If you have had issues with your credit history, then it might be a little harder to get approved for a mortgage loan from a bank or a credit union. If you have missed a payment, been discharged from bankruptcy, or defaulted, there is a high chance that you already have a low credit score. Banks and Credit Unions will need to see a credit score higher than 550 to approve a mortgage application. With less than that score, top lenders will unlikely be willing to offer a mortgage loan; therefore your only alternative will be seeking help from bad mortgage lenders. Our team has over a decade of experience providing our clients with bad credit mortgages in Milton.
How to Check Your Credit Score
The bank will be able to pull your score from the two national Canadian credit bureaus, Equifax and TransUnion. You can request directly from these credit bureaus by visiting their website, which will require a small fee. Alternatively, our brokerage can pull your score and provide you with a copy for free. If you have a history of late or missing payments or are in bankruptcy or you are taking on too many debts, then there are high chances that your credit score will be poor.
Private Lenders for Bad Credit Mortgages in Milton
Rather than using the typical route of approaching banks when you have poor credit score, a much better way would be to deal with a private lender when seeking a mortgage. Our list of bad credit mortgage lenders in Milton will guarantee that you can get a loan with low or no credit score. Loans provided by these private lenders comes from individuals and companies who provide money to those turned away by banks. With these private lenders, you can receive a mortgage easily and quickly.
Requirements for Private Lender Mortgages
Private mortgage lenders will rarely consider your credit rating; rather they will put their focus on the value of the existing secured mortgage and the estimated selling price. They are ready to accept the high level of risk with borrowers with no or with poor credit score. However, they must be completely confident that in case of a default; they will be able to recover their invested money. When evaluating the risk of the home, they measure its Loan to Value ratio, which is typically a home’s mortgages divided by its selling price. Our extensive network of lenders in Milton will go up to 75% Loan to Value.
Interest Rates and Fees for Bad Credit Mortgages
Private lenders often provide bad credit mortgages with higher interest rates than traditional banks due to the risk typical in this kind of investment. Usually, Canadian banks will charge around 3% on their mortgage, but private lenders will charge anywhere from 8 % to 15%. You might also be expected to pay lawyers, staffs, and home appraisers. It might be a good idea to compare rates and fees from different lenders to make sure you get the best deal on your mortgage. We have a list of lenders that service Milton and we can send you multiple quotes from them.
How to Repair Your Credit Score
Credit scores usually reflect the payment pattern over a period, but their emphasis is more on recent information; therefore, the best way to fix your credit score would be to pay your bills and dues on time. A slight delay can have a significant impact on your score. It is also a good idea to keep balances low on credit cards as well as other revolving credit since high outstanding debt also has an effect on your credit score.
Remember, credit cards are great tools when improving your scores, while you pay your bills. Putting little charges on your card means that paying off debt will be easy. Another foolproof way you can increase your score is to get a secured card from the bank. All Canadian banks offer secured cards, but before getting the card; make sure you pay a deposit, which is used to pay off outstanding debts on the card. For these cards make sure you only use 60% of the card limit, nothing more. You can fix your credit scores in just six months.