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Are you thinking of stepping onto the property ladder but afraid that bad credit or a bankruptcy will prevent you from moving into your dream home? While Canada’s big banks might consider those with bad credit to be high-risk, there are many lenders out there willing to work with those who have bad credit—regardless of your payment history.

Can I Get a Mortgage with Bad Credit?

A lot of Canadians have bad credit. That shouldn’t mean you can’t get a mortgage to buy a home. But that’s not how it is with the traditional brick-and-mortar banks in Canada. They see those with poor credit as being a high risk to default on that mortgage—at least until your credit score improves.

Fortunately, the lending environment has changed in Canada. There are lots of options for those with bad credit looking to get a mortgage. To determine what kind of mortgage those with bad credit qualify for, private lenders still consider income, type of employment, down payment, credit profile, if you’re a first time buyer, and other factors.

How Do I Qualify for a Mortgage with Bad Credit?

One of the most important factors lenders look at when considering those with bad credit is your employment and income. Private lenders want to make sure you make enough money to pay for your mortgage.

On top of that, many lenders might require a higher down payment. While someone with excellent credit may only need to come up with a down payment of 5%–10%, those with bad credit may have to put down more.

Keep in mind, the higher the down payment, the better your chances of getting approved for a mortgage . That’s because a higher down payment shows the lender you are able to save and budget.

Keep a Budget in Mind

Your down payment represents a percentage of the value of the home you’re looking at, so it’s important to go into the mortgage and house-hunting process with a price range based on your maximum down payment.

One way to figure this out is to determine your debt-to-income ratio . The higher the ratio, the less likely it is you will be able to meet your monthly obligations. Be sure to factor in all your monthly costs, including condominium fees, property taxes, home insurance, interest charges, and the principal amount of the mortgage.

Potential lenders also look at your total debt-to-income ratio, but they also consider additional monthly payments, such as student loan debt, car payments, and credit cards.

Canadalend.com: Helping Those with Bad Credit Find Their Dream Home

If you have bad credit or have filed for bankruptcy and want to buy your first home, our mortgage brokers can help you both find a mortgage and tell you how you can improve your credit score.

The licensed, independent agents at Canadalend.com have access to hundreds of different lenders, many of whom provide mortgages to those with bruised credit or have filed for bankruptcy. To find out how you can get approved for a mortgage and rebuild your credit score, contact Canadalend.com today. You can also apply o nline and a Canadalend.com mortgage specialist will set up an appointment at your earliest convenience.

With interest rates hovering near record lows and expected to stay low for the foreseeable future, you may be wondering if now is a good time to refinance and save money. If you haven’t considered the benefits of refinancing your home, you may be missing out. Not only does refinancing with lower interest rates help you save money, you can also increase your personal and/or family’s wealth.

Now the Perfect Time to Refinance?

Refinancing your mortgage is a great way to access money using the equity in your home. This could be a less expensive way to borrow money than taking out a traditional loan.

As per government guidelines, Canadians can borrow up to 80% of their home’s appraised value when refinancing through traditional sources, such as banks or credit unions. For example, if your home is worth $500,000, you can access up to $400,000 when refinancing. Or, if your home is worth $300,000, you can refinance up to $240,000. Some private lenders, however, will go up to 85% or even 90% of your home’s value. If you’re looking for a higher amount, an independent agent can help find a refinancing open that works best for you.

Why Refinance?

Canadians refinance their mortgages for a number of reasons. The most popular reason to refinance in Canada is to consolidate debt. In fact, $20.6 billion of home equity was used to repay consumer loans over the last year.1

Refinancing is a great way to consolidate debt acquired from high interest rate credit card balances and loans. That’s because the interest you pay when refinancing is significantly lower than what you’d pay with a credit card. By consolidating your debts at a lower interest rate, you can save money and bundle all of your debt into one place.

Another popular reason to refinance is to access the liquidity of homes. In 2014, $17.4 billion was refinanced for home renovation; $7.7 billion for investments; $6.6 billion for purchasing, including tuition; and $10.3 billion was used for other purchases.

If you want to reduce your monthly obligations, you might want to refinance your mortgage by selecting a longer term. While this will cost you more in interest, it will reduce your monthly payments.

Canadalend.com: The Nation’s Refinancing Leader

Mortgage rates have been cut in half over the last eight years so it continues to be an excellent time to refinance. That said, there’s a lot to consider when it comes to refinancing. With tens of thousands of dollars in potential savings at stake, it’s a decision you don’t want to take lightly.

At the same time, refinancing can be a stressful process. If you’re not given objective advice and don’t possess a full understanding of all the details of your refinancing agreement, it can be difficult to make an informed decision.

If you’re thinking of refinancing to save money, consolidate debt , or access the equity in your home, give the licensed, independent agents at Canadalend.com a call. Our comprehensive review and calculation process will help you make the most informed decision.

To find out if now is the right time to refinance, contact Canadalend.com today or apply online and a Canadalend.com mortgage specialist will set up an appointment at your earliest convenience.

Sources: 
1. Marr, G., “Great news coming if you’re renewing a mortgage, you’re about to save money,” Financial Post web site, November 18, 2014; http://business.financialpost.com/personal-finance/mortgages-real-estate/great-news-coming-if-youre-renewing-a-mortgage-youre-about-to-save-money.

1. Marr, G., “Great news coming if you’re renewing a mortgage, you’re about to save money,” Financial Post web site, November 18, 2014; http://business.financialpost.com/personal-finance/mortgages-real-estate/great-news-coming-if-youre-renewing-a-mortgage-youre-about-to-save-money.

Everyone wants to get the lowest interest rate possible when getting a mortgage or refinancing. But how is your interest rate determined? And what happens if you have bad credit? There are a number of key factors that can affect your mortgage finance rate .

Factors That Determine Your Mortgage and Refinancing Rates

The Bank of Canada announced recently that it lowered its benchmark lending rate to 0.5%. It was the second time this year the central bank has dropped the rate to help kick-start the Canadian economy.1

The Bank of Canada’s overnight lending rate influences the rates commercial banks offer potential home buyers or those looking to refinance because it impacts their cost of borrowing. Banks tend to pass on any savings or costs to consumers.

Some of Canada’s big banks cut their prime mortgage rates to 2.75% immediately after the Bank of Canada said it would lower its lending rate. Just because the banks are advertising 2.75%, though, doesn’t mean that’s what every first-time home buyer will get.

In fact, many borrowers are surprised to find that the advertised rate is not necessarily the mortgage or refinancing rate they are offered. The fact is; mortgage and refinancing rates can vary day-to-day depending on a large number of factors. For example, a low credit score and high loan-to-value ratio will increase your mortgage rate. The loan size, type of home, and term length will also influence mortgage and refinance rates.

Credit Score

Your credit score is one of the first things lenders will want to look at when you apply for a loan or refinancing . Lenders price mortgages based on risk. The higher your credit score, the less of a risk you are for lenders and the greater the chances are you’ll pay your loan back on time.

Canada’s biggest credit companies use a scale from 300 to 900. To get the best mortgage or refinancing rate, many lenders want to see a minimum score of 680. Factors that negatively affect your credit score include high account balances, outstanding loans, late or skipped bill payments, even having too much available credit.

Income

Lenders that offer prime mortgage and refinancing rates will still work with a credit score under 700. But you need to show that you have a dependable source of income.

Your mortgage rate will fluctuate based on whether you have a confirmed on non-confirmable income. Lenders prefer confirmable income; a full time job with regular pay. Prime lenders will also work with non-confirmable incomes, which is common among those who are self-employed or work on commission.

Down Payment

The higher your down payment as a percentage of the value of the home, the better. A larger down payment shows the bank you know how to save money. It also means you have more at stake in the property. The less you have to put down, the higher your mortgage rate.

Equity

If you’re refinancing, lenders will increase your mortgage up to a maximum loan-to-value ratio of 85%. The more equity you have in your home, the more prime lenders are willing to lend at a good rate since it’s backed by a secure asset.

Canadalend.com: The Country’s Mortgage and Refinancing Leader

There are a large number of factors that determine your mortgage and refinancing rate . If you’re looking to step on the property ladder or are interested in refinancing, the independent, licensed professionals at Canadalend.com can help you determine what kind of loan you qualify for. They will also help you get the best rates possible.

Whether you have bad credit, have been turned down by one of Canada’s big banks, applied for bankruptcy, or are self-employed, Canadalend.com can help you secure a residential mortgage or refinancing .

If you are interested in seeing what kind of residential mortgage or refinancing rate you qualify for, contact Canadalend.com or apply online and a mortgage specialist will help set up an appointment at your earliest convenience.

Source:

“Bank of Canada lowers overnight rate target to 1/2 per cent,” Bank of Canada web site; http://www.bankofcanada.ca/2015/07/fad-press-release-2015-07-15/

Getting married and buying a home are two major milestones. Unfortunately, according to the latest data from Statistics Canada, the average duration of marriage for those who get divorced in Canada is 13.7 years.1

If you are getting a divorce and keeping the house is an option, there are a number of different mortgage refinancing solutions you can consider and discuss with an experienced mortgage broker.

Refinancing a Mortgage in the Event of a Divorce

For most married couples, a home is their biggest asset; helping them build up equity for retirement. A home can also be the biggest asset when going through a divorce; selling it and providing both partners with enough equity for a fresh start.

Most people just presume that you need to sell a home if you are getting a divorce. You don’t. If you are in the midst of getting a divorce and keeping the house is an option, refinancing a mortgage to buy-out your spouse’s interest in the home may be your best option.

In Canada, you can borrow up to 80% of a home’s appraised value when refinancing. For example, if your home is worth $500,000, you can refinance up to $400,000. In today’s ultra-low interest rate environment, refinancing a mortgage makes a lot of sense.

Not only does mortgage refinancing allow you to buy out your spouse’s equity, refinancing can give you more flexibility. This could include refinancing at a better rate, modifying the amortization period, and even lowering your monthly payments.

There are also other options if you want to stay in your home. A home equity line of credit (HELOC) allows you to re-borrow a portion of the equity you have built up in your home. Best of all, it’s a revolving line of credit, that means you can use it whenever and however you like.

The borrowing rules on a HELOC are different than mortgage refinancing. A HELOC is available to homeowners that have at least 20% equity in their property. Other qualifications include a steady income and good credit score. With a HELOC, you can access up to a maximum 65% of your home’s value. Your HELOC and home balance cannot equal more than 80% of your home’s value.

Getting a divorce is never easy. And thinking about current mortgage rates and refinancing your mortgage may not be a top priority right now. But eventually, you will need to consider your options.

Canadalend.com: The Country’s Refinancing Leader

If you’re getting divorced and are feeling overwhelmed, the licensed, independent agents at Canadalend.com can help. They will provide you with objective, personalized mortgage refinancing advice that will help you make the best, most informed decision possible.

To review your mortgage refinancing options, contact Canadalend.com today or apply online and a Canadalend.com mortgage specialist will set up an appointment at your earliest convenience.

Sources: 
1. “Marital Status Overview 2011,” Statistics Canada web site; http://www.statcan.gc.ca/pub/91-209-x/2013001/article/11788-eng.htm