Banks are very strict when considering loan requests, as they want to avoid lending money to people with negative credit scores. Credit unions are quite flexible, demanding 550 points to approve loans but those who fall below this point must look for other options. We can help you with bad credit get a mortgage loan from our widespread network of private lenders in Sarnia. A bad credit mortgage is given to people with bad credit but enough equity on their home. Our team of experts has many years of providing our clients with bad credit mortgages in Sarnia.
How Can you Get a Copy of Your Credit Score?
Banks and credit unions can pull anyone’s credit score directly from credit bureaus. If you want one for yourself, visit the official websites for TransUnion and Equifax, the leading credit bureaus in Canada, for a copy. They will charge you for this but if you want a free copy, just reach out to us. If you receive a poor credit score (below 550), that is a sign that you are either bankrupt, tend to borrow more than you can repay or never pay back. A poor rating prevents you from accessing loan facilities offered by institutional lenders but that is not the end of the road.
Bad Credit Lenders for Sarnia Mortgages
Property owners with bad credit can only rely on private lender if they hope to take out mortgages. We have a network of such lenders in Sarnia who do not care about your credit score. They will also ignore bankruptcy and consumer proposals to give you the required money. The mortgage may be used as you like since private lenders in Sarnia, Sault Ste. Marie, and other parts of Ontario do not follow up to know what you do with the money.
Approval Requirements for Bad Credit Mortgages
Private lenders are not as concerned about your credit score as their business is in real estate. By looking at the debts against your property in comparison with the current selling price, they are able to determine how much equity you own. A private lender makes profits from property sales so they want a number that convinces them that you have enough equity to compensate them in case you are unable to meet the mortgage terms. Real estate rules state that a second mortgage lender can only be paid after the first loan against the said property is cleared. This means that people who own less than 20% of their property are unlikely to get bad credit mortgages in Sarnia. Bad credit mortgages are also instrumental in gradually building one’s credit score.
Bad Credit Mortgage Fees and Rates
Private lenders charge 8-15% interest on the mortgage, which is almost double the bank rate, but there are good reasons for that. People who seek bad credit mortgages definitely have poor credit history making it important for private lenders to protect themselves from this high risk. They achieve this by turning administrative, appraisal and legal fees to the customer in addition to high-interest rates. This way, private lenders earn their profits even if the client is unable to repay monies owed. There are several moneylenders in Sarnia, all of whom charge different rates so the customers must shop around for the best prices. To save you the trouble, we have a network of private lenders in the city, offering bad credit mortgage loans in the city.
Improving Your Credit Score
Credit cards are the best tools to help you improve any low score because they are the most common. You should either make a habit of making only small charges on your card or opt for a secured credit card. This is a special card where a set deposit acts as security on the debt. This means that if you are unable to repay in time, the bank will simply deduct from that deposit. To make sure that the security covers your purchases, never spend more than 60% of the set limit. A credit score improves when lenders report on you to credit bureaus like Equifax and TransUnion. Defaulting or late payments are some of the issues leading to low scores over time. This said a bad credit mortgage could also help you build a positive credit score that will help you get better credit from banks.