You can get a mortgage, but it’ll be a bad credit mortgage. These can be a great option if you haven’t had much of a chance to get your credit score higher or if you’ve just had bad luck with borrowing. You’ll need to understand subprime lending, how bad credit affects interest rates, mortgage points and your down payment before you start looking – by working with us as your Canada mortgage broker you’re going to get all the help you need to find a mortgage that won’t break the bank. You’ll always want to understand all of your options before you start applying, so let’s get started.
550 isn’t Bad, but it isn’t Good Either
You can go lower, but you can’t go much lower. This is in just the right area where you might be able to work on your credit enough to get a normal mortgage without extra interest points or a co-signer. You’re going to want to work hard to make your credit bump up to the 600-620+ range.
What are Sub-Prime Loans?
Sub-prime mortgages have had a bad rap lately, but used right and with full knowledge of just what they are they’re not so bad. They help people that wouldn’t qualify for traditional financing get a bad credit mortgage and buy a home, but it’s important to understand the fine print. Working with a broker like us you’ll be able to find the one that works best for you; if you try and do this on your own research them thoroughly and understand the benefits and risks.
What are Mortgage Points?
Mortgage points are a percentage of the value of your home that your lender charges you on top of your mortgage to get a little money out of you. It’s generally going to happen when you apply with bad credit, but when you work with one of our Canada mortgage brokers we’ll make sure that you get the lowest points possible. You shouldn’t have to pay more just because you have bad credit, and with us you won’t have to.
Bad Credit Affects Interest Rates
When you have bad credit, you’re going to end up with a higher interest rate, that’s just how it goes. We’ll work hard to bring this down as much as possible, but by working to bring down how much you owe (while keeping good accounts open), you’ll be able to raise your credit score and get a better interest rate when you apply.
Have a Higher Down Payment
If you can provide a 20% down payment you’re going to be able to get a much cheaper mortgage, even if you do have bad credit. Mortgages can be real pain if you have to pay private mortgage insurance; pair a 1% PMI payment plus 3 points of interest, interest payments AND your principal you can easily end up underwater. Don’t let this happen to you, work with us and get the mortgage that’s right for you.
Visit our bad credit mortgage page today to learn more!