Mortgage Rates Kitchener – Access Mortgage
Do you have bad credit or no credit? Are you self-employed or have unprovable income? Have you filed for bankruptcy in the past? Are you trying to get a first, second, or third mortgage? Well if so, Access Mortgage wants to hear from you! We can help you find the most affordable mortgage rates in Kitchener based on your individual circumstances. Read on for more information about finding mortgage rates with Access Mortgage.
Subprime mortgage rates in Ontario:
Although the term subprime mortgage was made infamous by the US housing collapse, a subprime mortgage is still a valuable asset to responsible Ontario homeowners. A subprime mortgage is a mortgage that falls just outside of CMHC insured lender guidelines. These lenders assist borrowers who are not bad off enough for a private mortgage but will not qualify through a traditional lender. What makes a Canadian subprime mortgage that much different from the US? During the height of the US housing market, subprime lenders were offering over 100% on the value of a home with little or no income verification. The lenders also offered ‘teaser rates’. These are rates that would start out being very low but balloon into a much higher rate. Canadian subprime mortgage lenders offer up to only 80% loan to value, and have a much more responsible approach to the lending that does not involve ‘introductory rates.’ Any mortgage arranged through an institutional lender with a loan-to-value over 80% must be government insured through CMHC or Genworth and are typically only available to home buyers; not for refinances. Private lenders can go to as high a loan-to-value as they want because the risk is entirely theirs!
B-lending / Subprime Lending:
In the Canadian mortgage market, there are three major classifications of mortgage lenders:
A – Traditional (prime) lenders (chartered banks, virtual mortgage houses)
B – Nonconforming or sub-prime lenders
C – Private lenders
You may already know about traditional sources. These would be your chartered banks (Scotiabank, TD Bank, Royal Bank and CIBC). There are also large virtual mortgage houses such as First National, ING, RMG etc. These lenders spotlight primarily on what is called in the industry, the prime market. These lenders focus on borrowers who have good jobs/credit and are purchasing homes within the traditional guidelines. For borrowers that cannot qualify under the “A” guidelines, the next option is to try to fit within subprime lender’s guidelines better known as “B” lenders. Mortgage rates in Kitchener for people that fit into B-lending guidelines will often be higher.
Subprime lenders do not provide high-ratio mortgages. These lenders charge a premium between 1-3 percent over traditional interest rates and usually do a much shorter term. Unfortunately prime lenders are very strict when it comes to borrowers that have poor credit. In many cases it’s a catch 22. Debts and minimum monthly payments are too high which reduces your credit score. But, how can you pay off your debts if you cannot refinance with a low interest rate due to your poor credit history? Many borrowers are facing a situation that unless they can refinance their house and use the equity to pay off their debt, they will never be able to catch up.
If you need a mortgage and have a blemish on your credit record, or if you need to re-mortgage to pay off bad debts, there are lenders who offer “bad credit” mortgages and debt consolidation services.
For more information about getting mortgage rates in Kitchener that suit your individual circumstance, please feel free to continue browsing through our Access Mortgage website. Click here to find our contact numbers and to fill out our contact form.