Mississauga has a lot going for it. It’s home to Pearson International Airport. The city offers opportunities in several critical sectors like Information Technology, Telecommunication, and Finance. As of 2022, the population of Mississauga was 789,344. These are all good reasons to invest in this city.
Are you wondering why bad credit mortgages in Mississauga are popular?
Canadian banks place a heavy emphasis on your credit score before they approve you for a mortgage. Credit scores range between 300 and 900. They include information that includes the length of your credit history, the amount of debt you carry, and your payment history.
Poor Credit Range
According to Equifax, applicants who fall under the poor credit range, generally below 560, have a more difficult time qualifying for a loan. According to this agency, banks and credit unions generally see low-risk borrowers meeting a credit score of 660 and up to be acceptable.
Those with low credit scores look to bad credit lenders. We help them by providing bad credit mortgages in Mississauga. The same applies to clients in Acton, Milton, and Oakville.
Credit Scores That Different Lenders Require
- The banks want a credit score of 620 or more.
- Trust companies want a credit score of 560 or more.
- Private lenders are more flexible.
Getting a Copy of Your Credit Score
Banks and other lenders get credit scores from credit bureaus like TransUnion and Equifax. We provide copies free of charge, but you can request the information directly from these bureaus. Credit scores falter when a person doesn’t pay their bills, takes on too much debt, or goes into bankruptcy.
Bad Credit Lenders for Mississauga Mortgages
If your credit score is less than 560, you’ll stand the best chance with a lender offering bad credit mortgages. Our bad credit mortgage lenders in Mississauga will consider lower credit scores. Bankruptcy and consumer proposals restrict you from getting a mortgage through a bank or trust company. We have a network of private lenders providing bad credit mortgages in Mississauga and other cities across Ontario.
Approval Requirements for Bad Credit Mortgages in Mississauga
Private lenders don’t focus solely on your credit score. They evaluate the secured debts on the property and the estimated selling price.
The Safety of Their Investments
Private lenders need to consider the safety of their investments. They will refuse to provide mortgages when a property has too much secured debt. Private lenders register mortgages against a property allowing them to sell when the mortgage goes into arrears.
The LTV Ratio
To determine the risk, lenders calculate the Loan to Value (LTV) ratio of a property. The LTV can be determined by taking the value of the existing mortgages and dividing that by the estimated selling price of the property. Our lender network can provide bad credit mortgages in Mississauga for all homes with an LTV of no more than 75%. A large income or good credit score can help get better interest rates, but neither are approval criteria.
Bad Credit Mortgages in Mississauga Fees and Rates
Lenders providing bad credit mortgages charge higher interest rates than banks due to the inherent risks.
Major Canadian banks will charge interest rates between 3%-4% on mortgages. Private lenders can charge anything from 7%-15% as well as other fees to set the mortgage up. The lender will charge an administrative fee, the lawyers need to charge for legal work, and there is a home appraisal fee.
Comparing the rates and fees for the different lenders helps you get a better deal on your mortgage. Our network of bad credit lenders can provide mortgages in Mississauga as well as the rest of Ontario.
Improving Your Credit Score Over Time
To improve your credit score over time, you need to be able to pay off all credit cards and bills. Being on time with all payments helps.
Credit cards are a common tool used for improving a credit score while paying off bills. Only charging small amounts makes it easier to pay the balance off in full. Applying for a secured credit card at a bank is a good start.
Secured credit cards are offered by all banks and are easy to get. To get one, you must first pay a deposit which can be used to pay off outstanding debts. It is a good idea never to use more than 60% of the card’s credit limit and to pay off 100% of what’s owed. Your credit score will improve after around 6 months of consistently paying these off.