For every challenge, there is a solution. When it comes to our mortgage solutions, there are literally dozens of non-traditional lenders who are ready and willing to help out people who have—for whatever reason—fallen into bad credit situations.
It’s always important to have experienced help on your side when negotiating the pitfalls that can arise in the mortgage application process and a professional is most helpful when the lenders aren’t already knocking down your door to lend you money.
Non-traditional lenders are often the best choice for people who get turned away by the banks when looking for a mortgage, but the ‘No’ the applicant may hear from the bank may not be the same answer that it gives to an experienced Mortgage Professional. Take a look at your credit rating on a free site like Equifax to get started and ensure that the facts in the report are correct. The free reports won’t contain your score, but they will contain notes and details about the factors that make up your score. Ensuring that those notes are correct can save you tens of thousands of dollars in interest payments if an error was present.
Down payments of greater than 20 to 25% of the total value of the property to be purchased can almost always assure the lenders that there is a lower risk involved in the loan, thereby allowing them to issue a mortgage at the lowest possible rate regardless of the applicant’s credit history. 20 to 25% is a large number, however, and few of even the best-qualified buyers can put that volume of cash down up front. Mortgages that receive down payments of less that 20% of the property’s value are considered to be high-ratio loans and, therefore, require approval from the Canadian Mortgage and Housing Corporation (CMHC) or Genworth.
Bad credit mortgages granted to applicants with a history of bad credit will be considered to be high-risk so in order to compensate for that risk, the lenders will look to charge a higher interest rate. A Mortgage Professional will work with you to ensure that the interest rate charged is as low as possible. It is preferable to commit to a down payment of greater than 20% of the property value in order to achieve preferable rates. The full 20% is not always necessary, and people with bad credit but steady incomes can achieve favourable rates with down payments as low as 20%.
Regardless of your situation, there is an arrangement that’s best suited for you. To consult with an experienced professional who has helped out many good people who found themselves in bad situations, contact us or apply for a free online quote.
A SIDE (Based on qualifying terms)
5 Year -
Variable Rate Prime - .10% = 2.35%
Fixed High Ratio - 2.69%
Fixed Conventional - 2.79%
B SIDE (Bad credit/Low income)
1 Year or 2 Year Fixed - 3.69%
First Mortgage - 5.49%
Second Mortgage - 6.99%
Third Mortgage - 10.99%
All rates are subject to change without notice. Rates and Terms must meet qualifications for each program.