Bad Credit Mortgages in Stouffville

Bad credit mortgages in Stouffville is the name given to products for people who don’t qualify for more traditional loans. Generally, their credit rating has fallen below a specific range of numbers.      

A credit score is essential in qualifying for a mortgage with a Canadian Bank. This number is a summary of your credit history, and it gets created when you apply for credit and or borrow money for the first time. It Is based on a formula that’s calculated from your credit report.

Knowing your numbers and where you stand is a matter of finding the correct information.

How to Check Your Credit Score

Canada has two bureaus that handle credit information– Transunion and Equifax. The first reason to check your score is to detect fraud, errors, and inaccuracies. Any of the above can harm your numbers.

The Financial Consumer Agency of Canada reports that you can access a credit report online from TransUnion or Equifax. You can also get this information by mail. You can make a postal request with either company, but you’ll need to provide two pieces of identification, like a passport or driver’s license. 

Checking your credit score regularly will help you see what lenders see. You’ll also be able to understand your current position. If you’re looking for a quick way to check your numbers through Equifax, you can register for an account . 

Knowing your numbers will help you decide whether to apply for a traditional or private lender bad credit mortgage in Stouffville. 

Private Lenders For Bad Credit Mortgages in Stouffville

Equifax reports credit scores range from 300 to 850. Many lenders see credit scores of 670 and up as lower-risk applicants. The people with scores between 580 and 669 can often be called subprime borrowers. They can need help qualifying for loan terms from traditional outlets like Banks and credit unions.

Private lenders are a viable solution for people looking for bad credit mortgages in Stouffville. There are various other reasons why people can use a private lender to get a loan.

• Private lenders generally have a streamlined procedure that’s quicker than the banks.
• These alternative lenders put less emphasis on your credit history.

Overall, the lending requirements are more accessible.

Requirements For Private Lender Bad Credit Mortgages in Stouffville

Specific criteria lend themselves to a more streamlined process when people apply for bad credit mortgages in Stouffville.

• Private lenders work with the appraised value of a property and the existing available equity. It’s important to remember that the location and overall condition are also important.
• Alternative lenders use a Loan To Value Ratio (LTV), an essential metric benchmark for rejecting or improving an application.

The formula to arrive at the LTV works like this. Private lenders often divide the amount of the loan that’s asked for by the appraised market value of the house or property. The LTV is quite often assessed at 75% of these appraised values.

Here’s an example. A house with a market value of $1 million and $750,000 on an existing mortgage also has an LTV of 75%.

The private lender process is more streamlined and sometimes means quicker approval and funding. 

Interest Rates and Fees for Bad Credit Mortgages in Stouffville

Although the process is quicker, applicants need to remember that mortgages like this are high-risk. Because of this higher risk, private mortgage lenders must ask for higher rates and fees. The variance between credit unions, traditional banks, and private lenders depends on the LTV ratio.

There are several other factors that private lenders use to determine these rates and fees, including the property’s location and how complicated the mortgage product is. Generally, cities have higher maximum LTV ratios than rural areas. 

Applicants for bad credit mortgages in Stouffville should know the importance of a home appraisal. Doing a little preparation work can make a difference. If you’ve had any previous home inspection reports, add those. List any renovations and improvements made with costs and completion dates.

Even though you’re applying for a mortgage product that doesn’t focus on your credit score, it’s a good idea to take some simple steps to repair it.

How to Repair Your Credit Score

Here are a few simple tips on how you can improve your numbers.

Start by monitoring the number of inquiries you make on your credit score. These are known as credit checks. Too many of these can make you look desperate to a potential lender.

1. Consider keeping old credit accounts open even if you’re not actively using them. The longer you have one of these accounts open, the better it is for your credit score over the long run. 
2. Using under 35% of your available credit indicates that you’re responsible. 
3. Of course, making payments on time is the best way to improve your credit score. If you can’t make a large payment, make it at least the minimum.

Need Help Getting Bad Credit Mortgages in Stouffville? 

Credit issues don’t need to stop you from attaining your financial goals. Mortgage Broker Store is a private mortgage lender that can help you with a bad credit mortgage. We serve several locations in the GTA. That includes places like Oshawa, Richmond Hill, and Scarborough. Call 416-499-2122 or email ron@mortgagebrokerstore.com for some free advice. Our team has 34 years of experience.