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Getting Approved for a Mortgage with Bad Credit in Mississauga

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If you’ve been denied a loan or credit card, you probably know that your credit score is hurting. Lenders decide whether or not to loan a person a certain amount of money, based on how risky of an investment it seems to be. The screening process or qualification standards can be strict and comprehensive. If you are denied at a bank or large financial institution due to bad credit, it can be intimidating to apply for a mortgage in Mississauga again. You could be harming your credit score the more it gets pulled up. As the borrower, your credit history gives the lender an idea of the likelihood that the debts will be repaid on time, as agreed upon. However, there are lenders that are willing to help people with bad credit, even those who have declared bankruptcy. Most "A” lenders or large financial institutions are willing to work with people who have credit scores above 600. If your credit score is below 600 or a prime lender has denied you, there are subprime lenders and private companies that offer competitive mortgage products for people re-establishing their credit.
 
Sometimes, you encounter speed bumps on our journey that result in financial hardship. Perhaps you’re back on your feet and contemplating taking the plunge into owning a home. There are a lot of Canadians in this same financial position. While your credit history could hinder you from getting a mortgage loan from a prime lender, there are options available to people who are re-establishing their credit. Major banks and financial institutions are more conservative with who they lend their money to. If you do not qualify for a mortgage through one of Canada’s major banks, private lenders can provide you with the mortgage you are looking for, but it doesn’t come free.
 

Larger Down Payment

 
More often than not, when applying for a mortgage with bad credit, you will be asked to put a larger down payment on the home initially. A down payment is a percentage portion of the total value of the home, which is paid up front to the lending company to secure the mortgage. The more money you have saved for a down payment, the more likely you will be to get approved for a first mortgage or home refinancing opportunity.
 

Higher Mortgage Rates

 
Bad credit also likely means that you won’t be taking advantage of the lowest interest rates. People with good credit can secure mortgages with small down payments and low interest rates. However, if you are looking into financing a home with a subprime lender, it is important to factor in the interest you will be paying over time. Combine the down payment with applicable interest and fees; and it is easy to see how quickly the expenses can add up.
 
Bad credit doesn’t have to hinder your chances of securing a mortgage and becoming a homeowner in the Mississauga area. When taking out a mortgage, it is important to ensure that you are staying within your means and will be able to make the mortgage payments as agreed upon. 

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