Banks are credit unions must see a score of 550 points on a credit report so they can offer mortgages. In a bid to avoid lengthy recovery efforts banks flatly refuse loan requests for people with bad credit. Banks and institutional lenders are keen on financials and would rather dismiss a high-risk request than negotiate terms. To them, a good score is the only indicator of creditworthiness without which you can only approach lenders of bad credit mortgages in Orangeville. Private lenders believe that even with bad credit, people might have equity which can be measured to qualify them for a loan.
Scores Needed by Different Lenders
- Credit unions need 550 points
- Banks require 600 points
- Private lenders do not care for the score
How to Get Your Credit Score
Visit the official websites for credit reference bureaus in Canada to request your copy. Banks and credit unions can easily get your report from TransUnion and Equifax but other companies in the country also do credit reporting. Those who might need a free copy should contact our staff for a free copy. Private lenders might also report on customers to the credit bureaus in a bid to help other lenders avoid serial defaulters but they will not turn down loan requests due to bad credit. You must repay them on time though to avoid hefty fines or further damaging your credit score.
Private Lenders Offering Bad Credit Mortgages in Orangeville
From the credit score requirements, it easy to see that the only solution for people with bad credit is private lenders offering bad credit mortgages in Orangeville. Bad credit lenders are not concerned by bankruptcy proposals or poor credit as their business is in real estate. We work with a large pool of such lenders so it is easy for us to connect city dwellers with ideal bad credit mortgages.
Requirements for Bad Credit Mortgages
Bad credit mortgage lenders are usually private entities who understand how important home equity is. They provide borrowers to access money tied up on a property so that they can use it to furnish their bills or business projects. Rather than disqualifying people with bad credit, they choose to assess equity by calculating loan to value ratio. This is easily done by calculating total debts divided by the latest estimated price of a home. In a bid to protect themselves from losses private lenders offer registered mortgages. This means they can sell a property in default to try recovering their investment but that isn’t too easy. There is a clause in the mortgage act that dictates that initial lenders be paid before the private mortgage lenders can claim their cut.
Private lenders only accept LTV of 75% or less because it means that they might get compensated after all other debts have been repaid.
Bad Credit Mortgage Fees and Rates
Most clients wonder why private lenders charge 7% to 15% interest rates while banks are offering mortgages at 2.7% to 4% interest rates. Lending to people with bad credit is very risky as it increases the chances of not making profits in the long run. To reduce this possibility even further private mortgage lenders require their customers to pay all fees associated with the mortgage. You shouldn’t settle for the first offer you get because different lenders charge differently. To avoid the search you can rely on our network of private bad credit lenders in Orangeville.
How to Improve Your Credit Score
It takes ages to build a credit score but only a few errors to ruin it. Recovering is not easy but with patience, a bad score can be repaired. Change how you use credit cards and other forms of debt to makes sure that you can afford to repay when the time comes. Credit cards debt is very expensive and missing payments has serious consequences. If you tend to miss deadlines a lot you need to ask your bank about a secured credit card. This is a special card on which a deposit is made to cover credit card debts before the clients can do it themselves. Any efforts to repair your score will reflect on your report in 6 months so don’t worry if things don’t change a month after repaying.