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Choosing a Bad Credit Mortgage in Pickering

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For many Canadians, having bad credit makes it difficult to obtain new credit cards, apply for loans, and own a home. Banks and other large financial institutions have made their qualifications standards stricter in order to mitigate their risks when lending. This has left many Canadians unable to become homeowners as they had initially dreamed. There are alternatives for people who have been declined by their banks or other credit providers. If you have bad credit and are seeking a mortgage to purchase or refinance your home, there are private lenders in Pickering that can help get you approved. People with bad credit can still be afforded the opportunity to own a home, albeit at higher interest rates. So how do you know if you have bad credit or not?
 

Check Your Credit Score

 
Most people with bad credit are unaware of their current financial standing until they are rejected for a credit card, mortgage, or other type of loan. It is important to stay up to date with you bill payments, paying on time and in full. This will help re-establish good credit by showing a positive repayment history. Your credit report will be able to show a snapshot of your repayment history and the credit you have available to you. By checking your credit report online, you will also be able to check your credit score, the three-digit number that lenders use to deem if you are credit worthy.
 

Save for a Large Down Payment

 
If you are interested in purchasing a home, but have bad credit, it is important to save enough money to make a significant down payment. While people with good credit can get approved for a mortgage with good interest rates and as little as 5% down, people with bad credit may be asked to make a down payment of anywhere between 10-25% of the total value of the home. Be sure to choose a home that is within your means and ability to repay, since when entering a mortgage agreement, you are putting your home at risk as collateral.
 

Expect Higher Interest Rates

 
People with bad credit should expect higher interest rates when securing mortgages both from banks and private lenders. The higher interest rates correlate to the increased level of risk involved in loaning to a person with a poor repayment history. Fluctuations in the interest may affect your ability to pay your mortgage over time, so it is important to understand the terms of your agreement and how they might change over time.
 
Many people with bad credit are looking for mortgage loans to purchase or refinance homes in Pickering. Private lenders have become a popular alternative for people who cannot get approval from the banks or have not yet established a credit history long enough to warrant a large loan. Though people with bad credit are subject to higher interest rates and minimum down payments, the private lenders provide them with a financing alternative that would otherwise not be available to them. Private lenders give people who are in the midst of re-establishing good credit the ability to own a home and get back into good financial standing.

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