While you might be feeling like you are in a tough spot, with financial woes or credit agencies at your heels, there is light at the end of the tunnel. It might just come in the form of a Bad Credit Mortgage.
Let's face it, what person would like to hear or know they have bad credit? There are many people who are disappointed to be informed they have bad credit.
Bad credit can be a result of many things; too many late payments, inability to make payments for different reasons, you might have "bad credit" because you just haven't had any credit in the past, or maybe even reasons beyond the person's control such as a death in the family, job loss or illness.
However once a person has a bad credit score, it can be difficult to get any sort of help from a bank or financial institution.
How difficult is it to get bad credit mortgages in Canada? At one time it was impossible to get a mortgage in Canada if your credit score was below a certain number. However with the real estate market in Canada recovering, a bad credit mortgage seems somewhat easier to obtain. Lenders are also taking into account the reasons for this bad credit rating..
Information to note about these types of mortgages:
Most lenders offering bad credit mortgage loans in Canada will charge you higher interest rates compared to those with good credit.
- Your upfront costs may be comparatively higher.
- The required down payment may also be higher.
- It is important for both the borrower and the lender of a bad credit mortgage in Canada to make sure the borrower will be able to make the monthly payments. If not, the individual may fall right back into the bad credit category again.
It is advisable to check your credit reports prior to applying for a mortgage loan. There may be errors in your credit report, which if deducted in time can help you raise your credit score and in turn receive better terms on your mortgage loan. You can check your credit reports with any of the major credit reporting agencies such as Equifax and Transunion.