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 city, 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 are allowed to 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 that 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 for one every once in a while to know if you are in good standings. 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 carry a huge risk which is why a private lender would rather not lend to those with too many debts. When they design mortgage agreement, lenders gain the right to sell a property but if they do all previous mortgages must be paid first. To assess how risky a property is, potential lenders calculate 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 85% LTV or less. While not compulsory for approval a regular income and a score that is not too far from 550 might help you get great 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 2.7-4%. Bad credit lenders charge 7-15% in an attempt to diminish risk associated with this type of loan. To further ensure profits from their investment private lenders will leave the borrower to pay administrative, appraisal and other fees required to arrange the mortgage. We help our clients with bad credit by sending them multiple quotes from our private lenders’ network in Timmins. This makes it easier for you so that you can concentrate on more pressing matters needed to complete the mortgage process.
How to Remedy a Poor Credit Score
It is general knowledge that for credit score to increase you have to repay debts on time but that is not always possible. High interest rates on credit card debt do not help the situation either but credit cards are still popular in the city. Since credit cards are unavoidable you can use them to boost the credit score. Making small charges to your cards ensures that when they time comes you can easily cover the debt. Otherwise, you may use a secured credit card offered by leading banks in the country. To get one you must place a deposit which can be used to pay off your debt in case you are unable to. Ideally, you shouldn’t exceed a secured credit card’s limit by 60% and you must pay off all charges on it. It takes approximately 6 months for your credit score to improve so don’t fret if things remain the same one day after honoring a debt.