Banks are very strict about credit ratings which are the most reliable indicator of a borrower’s creditworthiness. With a poor credit score, a customer is highly likely to default on mortgages and most banks are not ready to deal with the lengthy legal implications of that. Credit unions are more flexible about credit score requirements but like banks, these institutional lenders cannot extend mortgages to people with bad credit in Owen Sound. We can help those with poor credit scores acquire bad credit mortgages in Owen Sound from private lenders.
Scores Needed by Different Lenders
- Banks need to see a score of 600 or more points
- Trust companies work with a minimum of 550 points
- Private lenders do not consider the credit score
How to Get a Copy of Your Credit Score
Citizens of Canada can request their credit score from Transunion or Equifax – the two largest credit bureaus in the country. Banks and other lenders have unique privileges that allow them to pull anyone’s credit report whenever they need to make a decision on mortgage requests. Credit reference bureaus gather information to help them reach the score, which can help lenders avoid risky clients. If you pay your bills before the due date, clear monthly credit card debts and never borrow more than you can repay, it is likely that you have a high score. Otherwise, yours will be so low that not a single institutional lender will dare provide the mortgages you need.
Bad Credit Lenders for Owen Sound Mortgages
Property owners who need a mortgage but have a low credit score can only turn to private lenders. These are private companies or individuals who are ready to extend loans to people without regard to their credit scores. They also extend services to clients facing consumer or bankruptcy proposals and even better, private mortgage lenders in Owen Sound will accept whatever reason given for needing the loan. You can use money lent for home improvements, tuition fees, vacation or medical bills as long as all mortgage fees are paid off.
Approval Requirements for Bad Credit Mortgages
While not at all bothered by an individual’s credit score, private lenders will need to see all debts associated with the property against which you want to place a mortgage. Bad credit mortgage lenders in Owen Sound are more interested in equity, which gives them an idea of how much risk they are taking. Homeowners must own more than 15% of the equity in their house to qualify for private bad credit lender mortgages. The Ontario mortgage act states that if a client is unable to honor their debt then a lender with a registered mortgage can sell it. Before recovering their investment, however, they have to wait until all creditors before they are compensated.
Rates for Bad Credit Mortgages
Lending to people with bad credit is a big gamble as chances of incurring losses overwhelm those of amassing profits. To prevent this inherent danger, private bad credit mortgage lenders resort to charging high interest rates and fees. A customer will cater to the fees needed to set up the mortgage and in addition to that, they pay anything from 7%-15% interest. Banks deal with less risk meaning that they can offer rates as low as 2.7% to customers but if private lenders take this approach, it could have dire consequences. To save you the trouble we have a network of private lenders who are ready to provide bad credit mortgages.
Slowly But Surely, Improve Your Score
High credit scores are the preserve of people who faithfully pay their bills and never borrow more than they can repay. Credit cards are the most common form of debt taken and for this; they can be the best tool for repairing a broken credit score. Monthly credit card payments will be more affordable if the clients only make small charges.
Instead of a regular card, many people trying to boost their credit opt for secured credit cards. These are only issued to clients who are ready to put down a deposit as security when overdue payments are generated. For your deposit to cover the loan plus interest, you must never exceed this card’s 60% limit. Combined efforts will speed up the process but generally, it takes about 6 months for a score to increase.