Bad Credit Mortgage
Many Canadians dream of one day owning their own home. But if you have a bad credit history it can sometimes seem like it’s impossible to ever get a mortgage. But there is hope. Even with poor credit, it is usually still possible to get a mortgage through a private or alternative lender.
Bad credit vs. no credit
Oftentimes people are turned down for mortgages because they don’t have enough of a credit history. Perhaps you yourself have never even had a credit card because you didn’t think you needed one. But that can make getting a mortgage harder because without a credit history, lenders can’t tell if you are a reliable borrower.
In other cases, some people have had credit in the past but due to unforeseen circumstances they just had trouble keeping up with the bills. That doesn’t mean that they’re still in that situation, and it doesn’t mean they can’t get a mortgage.
No matter which situation you find yourself in, you can still get a mortgage and buy a home for your family. Our brokerage has worked with many people in difficult credit situations and has helped them to become homeowners.
How much do you need to save to buy a home with bad credit?
When it comes to buying a home, credit is just one part of the process. While it is a big part, there are other items you will need to get in place before you can buy a home.
When you purchase a home, you will need a down payment in order to secure the financing. Usually, you will require a minimum down payment of 5% - but of course if you can make a larger down payment, it is to your advantage to do so, as it will mean that you mortgage payments will be lower.
Additionally, you should have funds available for items like lawyers’ fees, land transfers and title searches. And, if this is the purchase of your first home you may qualify for certain rebates and government incentives.
And if this sounds complicated, don’t worry. Our agents will be with you every step of the way to help you through the process.
Why you should get pre-approved for a mortgage before you start house hunting.
Regardless of how good or bad your credit is, it is important to get pre-approved for a mortgage before you start looking for a home. Your pre-approval will let you know exactly how much of a home you can afford and give you an idea of what you mortgage payments will be once you become a homeowner.
Also keep in mind, that many real estate agents will not work with you unless you’ve already been pre-approved for a mortgage.
During your application process, you will work with one of our agents who will explain your various mortgage options and then work to find you the right type of mortgage and lender that suits your needs.
Tips for Getting a Mortgage When You Have Poor Credit.
Poor credit history shouldn’t prevent you from becoming a homeowner. Here are a few tips that can help you get a mortgage even when you have poor credit.
We work with dozens of lenders, some of whom specialize in offering clients debt consolidation loans. Getting out of debt can be very difficult, for anyone, and we know it can be hard to ask for help in paying it back. We are here to work with you and get you the loan on the terms and payments that will work for you so you know exactly when you will be out of debt.
Save a Larger Down PaymentTypically, first time home owners only need about 5% of the purchase price of the home (depending on the purchase price) however if you can save more than the 5% it can help your case for purchasing as it shows you have financial stability.
Work with a BrokerIf you only go to one financial institution, then you are limited to the financial products they can offer. However, if you choose to work with a mortgage broker, you will have the doors opened to working with dozens of lenders across the country. Our brokerage has many connections with lenders who specialize in working with those who have a poor credit history.
Having a poor credit history and searching for a mortgage can seem like they don’t go together, but the fact is, there are many options available. We are here to work with you and make sure that you can purchase a home for your family to grow in. We understand that it can be hard to even approach a lender when you know that your credit history is less than ideal, but you don’t need to feel embarrassed – we work with clients in all situations and we have the experience to help you find a solution. Don’t put your dream on hold for any longer, call us today!
Bad Credit Mortgage FAQ's
Everyone’s financial situation is different, so this isn’t a yes or no question. In working with you, we will look at your specific circumstances and determine whether it will affect you or not – and what you can do about it. We can discuss your options soon with a virtual appointment or call.
With all of our clients, we start with an application for a mortgage and that will give us all the information we need to start the process. We will start there, and determine what the next steps should be - including potentially a pre-approval for your mortgage. Contact us today!