Banks rely mainly on credit score when deciding which clients are eligible for various loan products. A score of 600 points is needed to be approved for a bad credit mortgage but not everyone is in this category. Institutional lenders are under very strict rules, which prevent them from offering credit to those below the minimum score but private lenders are free to lend to whomever they like. Bad credit mortgage lenders in Port Colborne do not ask to see your credit score when you need a loan. Our company can connect you with the major lenders that offer bad credit mortgages in Port Colborne.
Credit Score Figures Needed by Different Lenders
- 550 points or more are needed to convince credit unions
- Private lenders are not bothered by credit score
- Banks will only lend to people with 600 or more credit score points
How to Check Your Credits Score
This score is based on your borrowing and repayment habits in Port Colborne. The two leading credit reference bureaus in Canada; Transunion and Equifax calculate credit score in Canada. You can visit their websites to request an updated copy of your credit report at any time. Banks and institutional lenders can check your score directly but you can also request us for a copy as we also do credit reporting.
Bad Credit Lenders for Port Colborne Mortgages
People with bad credit, consumer proposals, and bankruptcy proposals can only turn to private lenders offering bad credit mortgages in Port Colborne. They only ask why you need the loan for record keeping but unlike banks, they are not too keen on how you spend the mortgage either. You can use the money to fund a business, pay for home renovations or education among other personal issues. By allowing you to access the equity in your property, the private lenders give you a rare shot at rebuilding your financial future.
Approval Requirements for Bad Credit Mortgages
Private lenders do not mind your score but they certainly follow a process to eliminate ineligible borrowers. Lending to people with poor credit is a risky venture so they avoid offering mortgages if there is already too much debt on the property. To know how much risk a house poses, they must calculate its LTV or loan to value ratio. This is achieved by dividing the total value of mortgages on a property by its current appraised selling price. If the result is below 75% private lenders will have no problem lending to you. If it is above that, you will, unfortunately, be turned down as it shows that you own very little equity in the property for the lender to get any profits.
Fees and Rates for Bad Credit Mortgages in Port Colborne
Private lenders resort to charging high interests owing to the danger of lending to people with bad credit. Their mortgages are provided at 7%-15% interest while banks charge 3%-15% interest. In addition to the interest, you must be ready to pay administrative fees needed in completing the process. It is wise to compare prices from different bad credit mortgage lenders in Port Colborne to ensure that you get the best deal. We have a wide network of such lenders ready to provide mortgages to residents despite their credit scores. If you need help, we can send some quotes to ensure the best rates. Private lenders do not require a high income but it will help you negotiate better rates.
Different Ways to Improve Your Credit Score
Consistently paying bills and debts are the only way to improve a credit score but you can speed up the process. It is wise to make only small charges to credit cards as these are more affordable. Secured credit cards offer a special way to improve credit as you must place a deposit as insurance. If you forget to repay the debt, your bank will deduct t payment from this amount to protect your score from dwindling. For this to work, never exceed this card’s 60% limit and pay the debt as soon as you remember. If you keep focused at credit best practices then after 6 months you will get a better score. You may not be able to access a bank loan but private lender loans could also help in improving your credit score as long as the debt is repaid according to the terms.