Institutional lenders must adhere to strict rules before approving any mortgages in Canada. This creates a situation where banks and trust companies cannot lend to people with bad credit. Citizens in this category soon realize that the only place to go for loans is private lending companies if they ever need a mortgage. We help people with bad credit find private lenders, to get the bad credit mortgages in Stratford they seek.
Credit Scores Required by Different Lenders
- For a trust company to give a mortgage you need 550 points or more
- At least 600 points are required to get attention from a bank
- Bad credit lenders do not consider credit score
How to Verify Credit Score
Canada is served by two major credit bureaus Equifax and TransUnion, both provide a reference for people who need to understand their credit standings. You can visit relevant websites to request a copy of your own report but note that banks and other lenders can get your report from the credit reference bureaus. We also do credit reporting and encourage our customers to reach out to us if they want a free copy. Poor credit ratings are as a result of failure to pay bills, defaulting on debts or simply borrowing more than you can repay.
Private Lenders Offering Bad Credit Mortgages in Stratford
If you need a mortgage with a credit score below 550 only a private lender is able to grant it to you. Stratford city’s bad credit mortgage lenders usually offer mortgages without much fuss about a client’s credit score. Bankrupt, jobless and people who often evade payments are most likely to have a poor credit score.
Requirements for Bad Credit Lender Mortgages
Loan to value ratio is the most important figure for a private lender whose main interest is the real estate market. They will agree to issue mortgages to people with poor credit but only if there is enough equity left. The mortgage agreement from a private lender allows them to sell off the property if customers are unable to repay but there is still a chance that this might not suffice. Before a private lender can be compensated, they have to ensure that other mortgages that came before are cleared. It is due to the uncertainty that private lenders adamantly refuse to provide mortgages on a property with LTV above 75%. Loan to value ratio is obtained by dividing a property’s total debts by its current price. It is not a requirement but salaried individuals with a relatively good credit score can negotiate better interest rates.
Interest Rates and Fees
Bad credit means that you have to accept whatever you can get and that means taking expensive loans. Private lender bad credit mortgage interest rates range from 7% to 15%, which is very different from banks that charge about 2.7% to 4% interest on mortgages. You must also factor in administrative fees for lawyers, home appraisers and other professionals in the mortgage set up process. You should be open to different mortgage lenders so you can find good deals. We know many lenders in Stratford and suing these contacts we can send multiple quotes to help our customers find the best interest rates.
Boost Your Credit Score
Paying off your credit card debt and bills will cause your credit score to increase. To do this quickly you must be able to pay all monthly debts on time to make sure that the lenders give a good report about you to credit reference bureaus. You may get a secured credit card from the bank and make a deposit to be on the safe side. With a secured card, you can make some purchases without worrying about the repayment. Deposited amount covers the debt until a customer can repay to avoid hurting a credit score over late payments. Other measures to improve credit ratings are working closely with private lenders who are willing to issue reasonable mortgages at an affordable interest. By honoring the terms you will gradually build a rapport with the lenders who may also report to credit bureaus. Once you have achieved the desired credit score it is possible to access the best rates offered by leading banks in the region.