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Getting Approved for a Mortgage with Bad Credit in the GTA

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For many people with bad credit, the label is unfairly tagged onto them due to past financial mistakes or situations that were beyond their control. Many people with bad credit think that it is impossible for them to secure a mortgage and become homeowners, especially in the GTA, where the cost of living can be expensive. Though major banks and prime lenders are tightening up their qualifications standards all across the country, many people with bad credit are still able to get approved with the help of private lenders. Contacting a mortgage specialist is the first step for people with bad credit looking to secure a mortgage. A mortgage specialist can help put you on track to re-establishing good credit very early on in the home buying process. When you go to multiple sources to apply for credit, each one will pull your credit report, which can negatively affect your credit score. A mortgage specialist will pull your credit report only once, using it to find lenders with mortgage products that are best suited for your financial situation. Mortgage specialists aren’t just experts in financing homes either, they can help with debt consolidation, refinancing, and home equity lines of credit.
 

What Stops Me from Getting Approved?

 
There may be a number of reasons why people with steady income are denied mortgage loans from prime lenders. Bad credit can stay with people for as long as 7-10 years depending on the type of default. Sometimes, these labels and numbers aren’t an accurate representation of a person’s current ability to repay their loans. Bad credit or poor repayment history is only one of the reasons people are not approved for mortgages.
 
Some self-employed people find difficulty securing a mortgage. Some private lenders have specialized mortgage products for self-employed. It is important to be able to document and prove your income. The self-employed have two methods of claiming income: declared income and stated income. Declared income is usually averaged over your last two income tax years, whereas stated income is your reasonable expected income based on the type and size of your business. Having a reliable co-signer is another way to increase your chances of getting approved for a mortgage loan.
 
A lot of people with bad credit are unaware that they will likely be required to pay a more significant down payment on the home to secure the mortgage. A person with good credit can secure a mortgage for as little as 5%, however, with bad debt, that percent can rise to anywhere from 10-25%. Having a substantial down payment ready when you apply for your mortgage increases your chances of approval.
 
It is still possible to be approved for a mortgage, even with bad credit. Contacting a mortgage specialist in the GTA can help simplify the process for you. A mortgage specialist has the experience, expertise, and relationships with lenders to save you a substantial amount of time and money. It is important to understand the current state of your financial standing. To do so, obtain a copy of your credit report online or via mail today. 

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