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Applying for a Bad Credit Mortgage in Vaughan

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Bad credit mortgages have given people with bad credit the financial flexibility to own a home or refinance their existing home. Private lenders offer these types of mortgages to clients the prime lenders and big banks might deem as "too risky.” There are different types of mortgages that may be suitable for your given situation, however, it is best to consult a mortgage specialist. A mortgage broker is a licensed mortgage specialist who can help guide you through the mortgage process. This can be especially helpful for first time homebuyers who have no expertise in the real estate market, helping the process run smoothly. Mortgage brokers are also able to pass volume discounts directly onto you because of the high quantities of mortgage products they acquire. Engaging a mortgage broker can also help save your credit score too. When applying for mortgage products on your own, each institution you go to will pull up your credit score. These repeated reviews of your credit report can have a negative effect on your credit score. A mortgage specialist will pull your credit report once and use it to shop you prospective lenders.
 

Why Do Mortgage Rate Vary so Much?

 
Mortgage rates vary between institutions. All of the banks and private lenders have different products, which can make the marketplace ultra-competitive. This is why the pricing can vary so much.  The price you will pay can also be dependent on your credit, the type of mortgage, and the features included in the agreement. Some features that might be attractive to homeowners include the ability to make lump sum payments anytime and as many times as you would like. Once prospective homeowners understand each product and rate, they can choose what is best for them.
 

Other Factors that Affect Your Mortgage Rate

  • Unmarketable Property

Subprime lenders prefer easy-to-sell properties. They want properties that make it easy for them to recoup their investment on if the borrower defaults. In a case where the borrower cannot make the mortgage payments, the lending company will have to foreclose the home and sell it to retrieve their initial investment.

  • High Loan-to-Values

In general, the more money you put down, the lower your rate will be and the better chances you will have of getting approval.

  • Questionable Employment

It is important for prospective homeowners to be able to show consistent and provable income. Freelancers or self-employed people that want to become homeowners should begin documenting their income and declaring it during income tax season.

  • Missed Payments

Missed payments are an absolute no-no. You cannot give your creditors any reason to doubt your ability to repay your loans, especially if you have bad credit. Be sure not to let anything go to the collections agency, not even outstanding parking tickets.

 

Subprime or private lenders have been helping Canadians with bad credit securing mortgage loans in Vaughan for a long time. Many homeowners have already taken advantage of the opportunity to own a home or refinance their existing home to put themselves in a better financial position.

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