As Canadians watch what is happening in the housing market recently, many with bad credit wonder if they can ever buy a house. There are many reasons why good people end up with bruised or bad credit; financial setbacks, divorce, loss of job, especially prevalent during the pandemic. Working with the right mortgage broker can help you qualify for a mortgage while setting you up for a better financial future.
Why use a mortgage broker?
- Assist you in qualifying for a bad credit mortgage
- Access to private mortgage lenders who specialize in bruised and bad credit clients
- Create strategies to repair your bad credit
Although there is negative connotation with bad credit private mortgage lenders, these investors exist for a reason. With historic low interest rates, investors are looking for higher yield options. There are also many investors that have access to more capital due to the current Covid-19 lockdowns and/or property appreciation. We build partnerships with private lenders who get that borrowers with bad credit may be dealing with tough life situations. These private mortgage lenders are willing to look past your bad credit to consider your unique situation.
Private mortgages are short-term, interest only solutions for borrowers struggling to qualify with traditional lenders.
It’s also beneficial for bad credit borrowers to leverage a private mortgage to improve bad credit history. Private mortgages are short-term, interest only solutions for borrowers struggling to qualify with traditional lenders. With limited housing supply in Toronto and across Ontario, buying a house soon may support your financial strategy. Based on the Bank of Canada’s Survey of Consumer Expectations* for the first quarter of 2021, interest rates will remain low. Low interest rates will continue to fuel the Canadian housing market making supply a continuous issue.
*Bank of Canada’s Survey of Consumer Expectations
Bad credit borrowers should know their credit score to understand its importance. Contact Equifax** or TransUnion to get a copy of your credit report and ensure that it is accurate. While a mortgage broker will assist in helping you qualify with a private lender, the goal is to improve your bad credit position and move into a more traditional mortgage, quickly. It is helpful to know that private mortgage lenders will offer mortgages based on the house you want to buy. Lenders that offer a mortgage for bad credit clients base their assessment on the equity of your house, or property, and its location. With traditional lenders, credit score will be used to qualify the mortgage interest rate, as it is a key component of the overall mortgage lending assessment.
**What is a Credit Score – Equifax
Apart from the personalized service from working with a bad credit mortgage broker, they provide borrowers with preferred access to choices and a range of mortgage interest rates.
Credit Score & Interest Rate* – A Comparison
Credit Score | Interest Rate* | Lender Types |
|---|---|---|
Less than 600 No credit, rejected credit | 3.49% – 12% | Private Mortgage Lender |
600 – 900 | 1.5% – 5% | Credit Unions & Banks |
*Estimated interest rate only
Contact a Square Capital Mortgage Broker or Agent to learn more about qualifying for a bad credit mortgage. Checkout Square Capital Website for more information: Square Capital Management Inc.
Are you ready to get your mortgage?
Contact us today to get a free quote. We will help you understand the current market conditions affecting the mortgage market! Prequalify without affecting your credit!
