Your credit is a tool that you can use to gain access to a variety of financial benefits. In fact, having a high credit score and report can get you some of the best interest rates on a lot of credit products, such as credit cards, car loans, and of course mortgages. Then again, what happens to your financial prospects when you have a low credit score? In this article by Access Mortgage, we will take a look at how you can purchase a mortgage in Waterloo with bad credit, or no credit at all. Read on for more information.
Many people in this day and age get by just fine without owning or leasing a car. Some can even get along with no credit cards in their wallet. However, while lots of Canadians are content to rent apartments, there’s certainly a large population of us out there that are striving towards one goal. Owning a house to raise their family in. However, for those with bad credit, their prospects can seem grim. In fact, bad credit mortgages are also known as “high-risk” mortgages, because of the level of financial risk that both the borrower and lender are taking. So, let’s discuss the mortgage process for borrowers with bad credit, and how their low credit score might not necessarily be the end of their dreams.
Here are some of the ways you can get a mortgage in Waterloo with bad credit:
Although taking the time to rebuild your credit will always work in your favor when you’re searching for a mortgage, being patient is especially important for those who have had a consumer proposal or gone bankrupt. Most conventional lenders (banks and other traditional financial institutions, mainstream mortgage brokers, etc.) are probably not going to even consider approving you for a minimum of two years after your case was discharged. So, it’s best to take that time to improve your finances and get your credit score back up.
Improve your credit score:
Another area where patience is certainly a virtue. Take the time and make the effort to rebuild your damaged credit score. You can do so by being responsible with any credit products and financial commitments you still have. This means paying all your bills on time, and in full, regardless of what they pertain to. If you can’t afford to pay your full credit card statement, be sure to at least meet the minimum monthly payments.
Look into subprime and private lenders:
If you cannot wait until your credit is rebuilt, you can consider going with a lender that deals with bad credit borrowers. If your score is lower than 600, you might have no choice but to find a private lender. If your credit score is between slightly higher but still not excellent, you may qualify with a trust company or other bad credit lending institution. A reminder, with private lenders, instead of being able to put a 5% down payment on your home, with a mortgage rate of 3-4%, you’ll likely have to put a down payment of 20% or more, and your rate will be 10-15%, or possibly even more.
If you are dealing with a mountain of debt, but you want to obtain a mortgage in Waterloo, we recommend that you consider contacting the professional team at Access Mortgage. Click here to find our contact information and to fill out our contact form.