Many people seeking a mortgage often go to large lenders such as banks and credit unions. However, these institutions will have to analyse the burrower’s credit history, debt status, and the present financial standing. If you have a bad past credit issues you won’t qualify for a mortgage. Typically, these large lending institutions will need to see at least a credit score of 550 before approval. With less than that score, your only possible solution to owning a property is a bad credit lender that offers bad credit mortgages in Oshawa.
How to Check Your Credit Score
In Canada, there are basically two national credit bureaus through which your credit score can be generated; The Equifax Canada and the TransUnion. The bank or credit union can request credit score on your behalf, or you can simply check on both bureaus by mail, fax or telephone. You will have to pay a fee if you choose to access it online. We will provide a copy of your credit score free of charge.
Private Lenders for Bad Credit Mortgages in Oshawa
If your score is less than 550, you won’t qualify for a traditional institutional mortgage, but that doesn’t necessarily mean you won’t get a loan. You can apply for a bad credit mortgage with a private lender. Our available bad credit mortgage lenders in Oshawa will ensure your mortgage application is approved regardless of your credit score. These loans are provided by private lenders who use their own money to fund a mortgage. These lenders can be individuals or a group of investors who pools their money to lend those people in need of money. We have a broad range of these lenders across Oshawa and surrounding areas; therefore, there you will receive a mortgage much easier than any lender out there.
Requirements for Private Lender Mortgages
Private mortgage lenders rarely scrutinise the borrower; rather they put much focus on the property. Typically, the reason behind this is that private loans are not insured, which means the lender will have to fall back on the property should a default happen. They must be extremely confident that If this happens, that they will be able to recoup their investment. This confidence comes from evaluating an appraisal of the home done by an accredited appraiser. When assessing the risk of your property, they measure the property Loan to Value ratio. Typically, this is property’s mortgages divided its estimated selling price. In Oshawa, private lenders will go up to 75% Loan to Value.
Interest Rates and Fees for Bad Credit Mortgages
Rates and fees for bad credit mortgages are higher than the banks’, simply because of the level of risk involved. Usually, banks charges around 3 to 4 percent, but you should expect rates from private mortgage lenders to range between 8%-15%. There are other charges involved mostly involving lawyer’s fees, administrative fees, and home appraisers fees. The only way to make sure you get the best deal is to contact multiple lenders willing to offer bad credit mortgage. We have a list of lenders here in Oshawa and surrounding areas, and we are more than willing to send multiple quotes all in an attempt to make sure get the best deal.
How to Repair Your Damaged Credit Score
First, it is important to understand that fixing a damaged credit score is much the same as losing weight; it takes time, and there is no quick solution to repairing it. The only way you can improve credit score is by paying your credit cards as well as your bills on time. A missed payment even if it is a day late and collections will have a significant impact on your scores. If you have missed a payment, the best advice is to ensure you get current and stay current. Your credit card is one crucial tool you can use to improve credit score. Just put a small amount on the card, and you will be surprised how much this will mean to your score. Also, make sure you get a secured card from a bank. Luckily, every bank here in Canada will provide that, but prior to receiving the card put a deposit to be used when overdue payment is generated. Pay all the charges and always make sure, you do not exceed 60% of the overall credit limit. Six months from now, you will be surprised how much your score will be improved.