BAD CREDIT MORTGAGE
Just because you have bad credit, does not mean that you can’t get a mortgage. In fact, there are many bad credit mortgage solutions available and CityCan Financial can help you find them. The first thing you need to determine is if you do in fact have bad credit, and just how bad it is. Your CityCan Financial Toronto mortgage broker will be able to pull your credit report for you at no charge and will be able to give you the guidance you’re looking for. It is important that you limit the number of people looking at your credit bureau, as multiple inquiries will lower your credit score. At CityCan, we have access to over 30 different institutional mortgage lenders as well as access to over $100 million in private funds. We are very well positioned to shop the entire market and do all the legwork for you. If there is a bad credit mortgage solution for you, then CityCan will certainly find it!
YOUR BEACON SCORE (CREDIT SCORE)
Your credit score is referred to as your ‘beacon score’ or if you pull your credit bureau yourself through Equifax, than it is referred to as your ‘FICO’ score. The beacon score gives lenders a quick indication of your credit worthiness and can be the make or break factor on many mortgage approvals. The score ranges from 300-900 with 300 being the worst and 900 being the best. Any score under 600 is considered to be ‘poor credit’ while anything under 550 drops the status from poor to bad. Credit scores between 600 and 620 are considered fair, while credit scores between 620 and 700 are considered good to very good. Anything over 700 is excellent. When applying for a bad credit mortgage, a minimum 15% down payment may be required (or 15% minimum equity if refinancing). A larger down payment may be required, depending on your specific situation. While there are many variables in qualifying for a bad credit mortgage, or any mortgage for that matter, it is best to speak with your highly trained CityCan Financial Toronto mortgage broker today to get an idea of what you may be able to qualify for.
YOUR BEACON SCORE (CREDIT SCORE)
35% – Payment History – Make sure you pay your bills on time. An automatic bill pay system or a pre-authorized payment program can help with this tremendously.
30% How Much You Owe – If you have all your credit cards maxed out, then this is going to negatively affect your score. Try to keep credit card balances under 50% of the limit if possible. The lower the better.
15% Length of Credit History – This is the time since each account was opened and the time since its last activity. It is important to use cards periodically, rather than just let them sit. Just make sure you make at least the minimum payment each month and never let a payment lapse. Cards that have been sitting dormant for years will not have any positive impact on your credit score whatsoever.
10% New Credit – This refers primarily to the number of accounts recently opened and the number of recent inquiries. Don’t open up new credit accounts unless you need to.
10% Mix of loans – It is good practice to have a variety of different loans. For example, instead of having all credit cards, have a line of credit, a credit card, a car loan… etc.
BAD CREDIT MORTGAGE RATES
Bad credit mortgage rates are typically higher than what they would be for a prospective home buyer with ‘AAA’ credit. To a mortgage lender, a bad credit mortgage is a higher risk investment, therefore warranting a higher interest rate. The mortgage rate charged could be range from just slightly higher than the best available mortgage rate, or it could be quite a bit higher depending on the situation. Your highly trained CityCan Financial Toronto mortgage broker will make sure you understand all your options and will ensure that you get the lowest mortgage rate available that you qualify for.
BAD CREDIT DEBT CONSOLIDATION
If you already have a mortgage and have other debt as well, then you may want to consider a debt consolidation program. There may be options to combine all your debt into one mortgage loan, potentially saving you hundreds of dollars each month. Debt consolidation can be an excellent way to get you in control of your finances and to start you on track to credit recovery. Learn more about debt consolidation.