The government enforces strict rules on mortgages that all institutional lenders must follow. This is why banks won’t negotiate mortgages with people whose credit scores fall below the 600 mark. They are considered to have poor credit as a result of poor debt handling, but if you get disqualified by banks, there is still hope. We help people like you get much-needed funding from private lenders who do not mind giving bad credit mortgages in Timmins, Ontario.
Credit Points Required by Different Lenders
- Banks need 600 points
- Credit unions require a score of 550 points
- Private lenders do not care much for a credit score
How to Confirm Your Credit Score
To help them make informed lending decisions, banks can pull a client’s credit report directly from credit bureaus. Credit bureaus are organizations whose duty is to prepare a report on each citizen’s credit habits so lenders may have a valid reference point. Information given by lenders to TransUnion and Equifax is used to generate this credit score which individuals can also access at a fee. We also do credit reporting, so if you need a free copy, it is possible to get one. Credit scores change after some time, so it is wise to request one every once in a while to know if you are in good standing. If you don’t pay bills on time or just have a habit of taking on more than you can pay, it is highly likely that you will get a low score upon receiving the credit report.
Private Lenders Offering Bad Credit Mortgages in Timmins
Instead of your credit report, private lenders will pay attention to the existing debts on a property vs its current selling price. Bad credit mortgages are risky, so private lenders prefer not to lend to those with excessive debt. Lenders can sell a property under mortgage agreements but must first pay off all previous mortgages. To assess how risky a property is, potential lenders calculate the LTV or Loan-to-Value ratio.
This they do by dividing the value of all existing debts by a property’s appraised selling price. Bad credit mortgage lenders in Timmins will extend mortgages to borrowers whose homes have 75% LTV or less. While not required for approval, a regular income and a score close to 550 can help secure better rates. Make sure that the mortgage fees are paid in full to avoid dire consequences like losing your home. Defaulting on bad credit mortgages is also harmful to your credit score.
Fees and Interest Rates for Bad Credit Mortgages
Risky investments like bad credit mortgages carry higher interest rates than bank mortgages at 2.7% to 4%. Bad credit lenders charge 8% to 12% to diminish the risk associated with this type of loan. Private lenders make borrowers cover administrative, appraisal, and other mortgage arrangement fees to secure their investment. We help our clients with bad credit by sending them multiple quotes from our private lenders’ network in Timmins. This simplifies the process, allowing you to focus on more urgent tasks to complete the mortgage.
How to Remedy a Poor Credit Score
To increase your credit score, repaying debts on time is essential, though it’s not always feasible. High credit card interest rates worsen the situation, but credit cards remain popular in the city. Since credit cards are unavoidable, you can use them to boost your credit score. Making small changes to your cards ensures that you can easily cover the debt when the time comes.
Otherwise, you may use a secured credit card offered by leading banks in the country. To get one, you must place a deposit that covers your debt if you cannot pay.