Looking to Get a Mortgage with Bad Credit

Many Canadians aspire to purchase their own home. However, for many with poor credit, this goal may seem out of reach. For many would-be purchasers, the year 2020 has presented a variety of hurdles, such as mortgages for borrowers with credit issues or problems. Some Canadians have opted to put their goal on hold due to a global pandemic and economic uncertainties. Others, on the other hand, may find that waiting is not the best option since they are ready to buy a home but are being held up by credit or income concerns.

However, it is still possible to get a mortgage for borrowers with income problems, and in this blog, we are going to discuss what you need to know.

What is a Bad Credit Mortgage?

A bad credit mortgage, as the name implies, is one that is tailored to homeowners with less-than-ideal credit. One of the first things a potential lender will do when you apply for a mortgage in Canada is check your credit score with the two major credit bureaus: Equifax and TransUnion.

The higher your credit score, the easier it will be to secure a mortgage – and the better the interest rate you will be able to get. The credit scores of Canadians range from 300 to 900. A credit score of less than 600 is considered poor.

Looking for a bad credit mortgage lender?

You can always apply for a bad credit mortgage if your credit score is below 600 and you don’t see yourself waiting till it improves before getting a mortgage. Mortgages for borrowers with income problems are available from a number of alternative and private lenders in Canada.

However, working with a mortgage broker is the best way to ensure that you get a reliable lender. Mortgage brokers are experts in the field and know which lenders are best to work with and which to avoid, allowing you to make the best financial decisions possible, especially when it comes to mortgages for borrowers with credit problems.

I’ve been approved for my bad credit mortgage. Now what?

So, you’ve been approved for a bad credit mortgage – congratulations. Here are a few things that you should still keep in mind:

Before you close on your house, don’t seek new credit. Every mortgage, including those for people with bad credit, is dependent on your credit score at the time of application. If you make a large purchase on credit before closing on your home, your mortgage contract with your lender may be jeopardized.

Before your renewal date, work on improving your credit. When it comes time to renew your mortgage, the better your credit is at the time, the more likely you will be able to secure a standard mortgage with a much better interest rate.

Consider refinancing your home. You may wish to consider refinancing if your credit improves before your mortgage renewal date. Although refinancing will lower your interest rate, there will be a financial penalty if you pay off your mortgage early. Your mortgage broker will be able to advise you on whether or not refinancing is worthwhile.

Do you have more questions about how you can get a mortgage with bad credit? If you’re someone who is looking for Mortgage for borrowers with credit issues, mortgage for borrowers with credit problems, mortgage for borrowers with income problems, mortgage for borrowers with income issues, then our bad credit mortgage brokers in Surrey can assist you.

Are you ready to take the plunge and become a homeowner even though your credit isn’t perfect? If so, we can help. Contact Crown Funding Mortgage Brokers  today.