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Buying a Home with a Bad Credit Mortgage in Waterloo

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A bad credit mortgage is a financing alternative provided by private lenders who specialize in mortgage products for people with bad credit. Securing a mortgage in Waterloo can be difficult, especially if you haven’t established a sufficient credit history. Big banks and financial institutions have tightened up their lending qualification standards, making it harder for people with poor credit to get mortgage loans. When applying for a mortgage, Canadians should be aware of their credit score. You can retrieve your credit score online from one of Canada’s major credit reporting agencies for a small fee. This will allow you to gauge whether or not you will be accepted by prime lenders. Prime lenders usually will work with a person that has a credit score of 600 or higher given a few other factors. Even if you have a credit score that is lower, private lenders may be able to offer mortgage products that suit your very needs.


Lenders will want to know that you will be able to make the agreed upon payments in full and on time. Most lenders will ask for proof of steady income. For most people, this can be as simple as going back into your tax files from previous years to see how much you made. For freelancers and self-employed people, this can be more difficult. Those who work for themselves or own their own business, but want to secure a mortgage should begin by declaring their income. There are two ways for freelancers to report their income: declared income or slated income.

Down Payment

If you have poor credit, it is likely that you will be asked to pay a higher percentage up front. Some homebuyers with good credit can secure a mortgage for as little as 5% down; however, many people with bad credit will be asked to pay anywhere from 10-25% up front. The greater your down payment, the better chance you will have of securing a low interest rate and getting approved. It is important for first time homebuyers to save for a substantial down payment, especially if they have poor credit.

Property Type & Value

You will likely need to have your property professionally appraised before you are able to secure a mortgage loan. Additionally, the type of property will influence whether or not the lender decides to approve your application. Lenders prefer homes that are easy to sell, so that they can recoup their investment in case the borrower defaults on their payments. Private lenders work well for homes that need some extra renovation or are intended to be sold fairly quickly.
Most people do not take the time to understand the terms and interest rates before choosing a mortgage loan. Hiring a mortgage specialist can help the process run smoothly, as they bring years of experience and specialized expertise to the home buying process. They can help ease your concerns, answer your questions, and save you time and money. Hire a mortgage specialist today to help you secure a bad credit mortgage and become a homeowner in Waterloo today. 


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