Bad Credit Mortgage Ontario Canada
Getting a Mortgage with Bad Credit
Sometimes life goes awry, a failed business, job loss or maybe a bad divorce and your credit gets temporarily damaged. Life is full of ups and downs. We have plenty of mortgage lenders that understand that good people have bad credit and specialize in helping people get over periods of damaged credit.
Let us go to work for you!
We can help!
Getting a Mortgage with Bad Credit
Sometimes life goes awry, a failed business, job loss or maybe a bad divorce and your credit gets temporarily damaged. Life is full of ups and downs. We have plenty of mortgage lenders that understand that good people have bad credit and specialize in helping people get over periods of damaged credit. Let us go to work for you! Apply Now
We can help!
Bad Credit Mortgage Loans
Bad credit mortgage loans are a powerful tool to improve your credit rating.
Some of the ways bad credit mortgages accomplish this include:
1/ Combining multiple debts into a single loan and having a ‘One Payment’ schedule helps establish a consistent, on-time payment history.
2/ Amortizing debt over a longer period will lower payments and help you manage your bills within your cash flow parameters.
3/ A mortgage will have lower rates than unsecured credit lines – saving you money with lower interest.
In short, your bad credit mortgage can help put your damaged credit history behind you.
Bad Credit Mortgage Broker
A bad credit mortgage broker specialises in out of the ordinary lending policies.
They excel in helping borrowers with bad credit get a home loan to buy a property or refinance their current mortgage and consolidate debt.
If you have defaults, judgments, a large number of credit enquiries or you’ve declared bankruptcy in the past, it pays to have a bad credit mortgage broker on your side.
A bad credit mortgage broker will take stock of your situation and help get your finances back on track.
As mortgage professionals, we’re trained in credit repair and debt consolidation strategies and can help develop a customized debt repayment plan to fix your fix credit problems.
Bad Credit Mortgage Lenders
There’s over 100 different institutions offering mortgages in Ontario catering to every type of borrower. A large and growing percentage of Canadians don’t qualify due to credit or income for a prime mortgage through an ‘A’ lender. There are however two other lending options available to consumers, B lending and private lending. So if you don’t qualify for a prime mortgage from a scheduled bank; BMO, RBC, etc, you can still get a mortgage.
Bad Credit Mortgages From B (sub prime) Lenders
(Trust companies, Credit Unions, Monolines)
With the debt loads that most Canadians are carrying these days and with more than 30% of working Canadians either self employed or on commission income, ‘B’ lending is a popular and proven source of lending.
B lenders are large Canadian institutions (Trust companies, Credit Unions, Monolines) offering a variety of lending mortgage products.
B lenders still require a credit score but will allow more transgressions than ‘A’ lenders.
Clients that fall into the ‘B’ category would be missing one of the major components that the banks and other ‘A’ lenders require such as income or good credit. They maybe recently bankrupt, they might be self employed and do not show their income or maybe have to low of a credit score to qualify with an ‘A’ lender.
This type of lending is often offered as a short term solution until the client either gets their good credit back or has the income to qualify through an ‘A’ lender.
‘B’ lenders provide an excellent lending option to the consumer.
Interest rates are 1 or 2 % higher than ‘A’ lenders. There are sometimes arrangement fees of around 2.00% to 3.00%.
Applying for a Mortgage with Bad Credit
The bad credit mortgage broker will ask for the same personal information as if you were applying for a standard home loan.
This includes a completed application so that the underwriters can see your financial situation.
Qualifying for a Mortgage with Bad Credit
How much down payment do I need to put down for a bad credit mortgage
Typically you need to put down at least 10% and more likely 15% to be approved if you can put down more even better. The more you put down the lower the risk to the Lender so the lower the interest rate.
What Income verification do I Need for a bad credit mortgage
Lenders prefer borrowers to be in long term, permanent employment with regular income otherwise you will need as much supporting paperwork to verify income as possible.
Mortgage Approval with Bad Credit Mortgage
Bad Credit Mortgage Rates
Mortgage rates on bad credit mortgages are risk based, the higher the risk to the lender the higher the rate. Mortgage rates can range from 3% to as high as 20% depending on the property, borrower and current economic conditions. Every client is evaluated on an individual basis based on ability to pay back the loan.
Our Mortgage Underwriting Team
We use Mortgage Origination Software to share your application with multiple Lenders saving you time and getting you the best deal possible.
Why Mortgage rates are higher for clients with bad credit
The simple analogy is that of motor insurance; if you have an accident or commit a traffic offence your next years insurance will go up, same with mortgages if you damage your credit your next mortgage loan will have a higher interest rate.
What is the Best Bad credit mortgage strategy?
Typically your objective should be to secure a short term mortgage up to 2 yrs, during which time you repair your credit score after which you can apply for a traditional mortgage at lower rates.