Banks and credit unions in Canada have strict mortgage approval requirements. They need a minimum of 550 points to approve any requests but few people are at this level. Left without a choice people with poor credit turn to bad credit mortgage lenders. We have a network of lenders ready to issue bad credit mortgages in North Bay, Caledon and other parts of Canada.
Credit Scores Required by Lenders in North Bay
- Banks require a minimum 600 points
- Trust unions will need to see 550 points or more to consider your application
- Private lenders do not check your credit score to decide who to lend
How to Check Your Credit Score
Canada is served by two major credit bureaus namely; TransUnion and Equifax. Banks and other institutional lenders can get credit reports directly from these organizations but to get a personal copy, citizens must pay a fee. We help our clients get their credit report free of charge so they can verify their credit scores with ease. To get your copy, visit any credit bureau’s official site for guidance on how to get it. Credit bureaus get information to determine credit scores from lenders who want to share information about borrowers with other in the market. Serial defaulters and people who borrow more than they can repay often have a poor score compared to those who are more consistent.
Bad Credit Mortgages in North Bay
Private lenders are the only option for people whose credit score is below 550 points. Also known as bad credit mortgage lenders they can give a mortgage loan without paying attention to one’s credit. They are focused on home equity as this to them is a good indicator of whether they will recoup in the event of default. Bad credit mortgage lenders in North Bay make their profits from selling real estate so before giving out loans, they must make sure that a borrower has enough equity to guarantee them compensation after prior mortgages have been repaid in the event that you are unable to cover the debt. These lenders understand that despite poor credit individuals may have money tied up in their property and it is for this reason that the private lenders in our network never turn down people with poor credit.
What Are The Criteria For Bad Credit Mortgage Approval?
They might not be concerned about your credit score but there is a set criterion used by bad credit mortgage lenders in North Bay. These lenders are very sensitive to risk and will not lend against property with huge debts. To protect themselves from defaulters, bad credit mortgage lenders prefer offering registered mortgages. This means that they can sell a home to recover their investment in case a client is unable or unwilling to repay. Private lenders are so keen on establishing a home’s equity to ascertain that they will get their cut after other debts on the property are covered.
They must calculate loan to value ratio of a home to establish just how much equity you own. This is achieved by dividing the total value of debts against the current appraised selling price of a property. They will not lend when the LTV is more than 75% as it means that the borrower owns very little of the property in question. North Bay residents with enough equity and good credit can negotiate better terms bearing in mind that different lenders have unique prices. It is important to repay bad credit mortgage loans in full and within stipulated timelines to avoid further damage to your credit score.
Fees and Rates
Banks typically charge between 2.5-5% interest on mortgages but private lenders often more than twice this. You must also pay administrative fees, legal charges and appraisal fees as the private lender must cushion themselves against the risk posed by borrowers with poor credit. There are significant differences in rates charged so borrowers must shop around for one that offers mortgages with ideal terms.
How to Gradually Improve Your Credit Score
Many people rely on credit cards to take care of emergency expenses but unfortunately, they are not consistent with debt payment. To make positive gains, you need to pay in time and make small charges on the card so you are able to pay the loan plus interest without a fuss. You can go a step farther to get a secured credit card which you can use without worrying about missing a payment. This is because there is a deposit made on that card as security for the debt in case you are late to repay.