Traditional lenders and banks frequently decline client approval because of bad, bruised, or no credit. However, this isn’t an issue at Canadalend. We know sometimes life just happens to good, hard-working individuals. You may experience illness, miss one or two payments over a few years, and want to rebuild your credit. When situations happen, we are here to help.
At Canadalend, we firmly believe in the value of your home equity, regardless of your credit situation. Whether you're considering a second mortgage or looking to refinance an existing one, our credit experts are here to guide you. We are confident that better mortgage rates for good or bad credit are just a renewal away, offering you a path toward a brighter financial future.
So, remember, with Canadalend, your home equity is more important than your credit score or reportable income.
How a Poor Credit Score Impacts Your Mortgage Eligibility
A good credit score is essential because it impacts the lender from which you can obtain a mortgage and the interest rate. Prime lenders may issue a mortgage if your score is above 700 and may consider scores between 600–700.
If your credit score falls between 600–700, the remainder of your mortgage application should be vital for approval. The lower your credit score, the increased risk you pose to your lender. Lenders (private or trust companies) may charge higher interest rates to compensate.
However, some lenders will only approve your application if your score is high.
While each lender has its own criteria, the range in which your score falls is more important than the point value. The general guide for mortgages based on credit score is as follows:
- Over 760 (Excellent): Those who fall into this range receive low interest rates and excellent terms on their mortgage, credit lines, and loans. You have an established history of responsible credit usage, a mix of credit types, keeping account balances low, and paying debts on time.
- 725–759 (Good): Lenders see that you generally pay your debt on time and your balances are low compared to established limits. You will receive reasonable mortgage rates for good credit with almost any lender. Their only consideration is that the balance-to-limit ratio may be high.
- 660–724 (Fair): Your score may concern some lenders, as you may pose a default risk. You might have experienced a few financial issues like late payments, accounts in collections, or too much debt. You may receive a loan, but you could possibly receive higher rates and need collateral or a deposit. Some work may be required to improve the score.
- 560–659 (Poor): This score can flag you as high risk. Obtaining new credit may be challenging. If approved, you may pay significantly higher rates. Late payments to several lenders, bankruptcy, or loan defaults may damage your score.
- 300–559 (Very Poor): Scores in this range rarely receive approval. To repair your score, focus on debt reduction, paying off anything in collections, making on-time payments, and using secured credit cards to rebuild your profile.
Need a Loan with Not-So-Good Credit? We Can Help
Even if your credit score could improve, you still have options. Most people can obtain a bad credit mortgage through alternative methods like Canadalend. While most banks approve those with good to excellent credit, even those with good credit may still be declined for other reasons like self-employment.
Canadalend is different. Credit isn’t the only factor we use to approve a loan or offer great rates and terms. We examine income and debt ratios, property value, and other factors to determine eligibility.
We help our customers by offering:
- Refinancing Options
- Eliminate CRA Arears
- Second Mortgages
- Emergency Expenses
When seeking a home loan for not so good credit, consult one of our trained mortgage specialists. Our priority is our customers; helping them is our number one goal.
Improving Your Credit Score
With credit, we’re talking about the score lenders give you based on how well you’ve paid your debts and bills in the past. Canada’s biggest credit bureaus are Equifax and TransUnion.
If your history suggests you don’t have a track record of paying back credit, you have to build it up over time, which lets you get a cheaper mortgage. This is why it’s common to get a mortgage with a bad credit lender with a relatively high interest rate, before refinancing once you’ve proven that you pay your debts.
While you build up your credit, we’re here to help you get the lowest rates available.
If you want to improve your credit score before obtaining a mortgage, we recommend boosting it by always paying your bills on time, remaining within your limits, and applying for credit infrequently. Applying for multiple credit cards implies you are desperate for money, hurting your score.
You can also diligently work on reducing debt. Balance transfer credit cards reduce interest rates or invest in a debt consolidation loan. Also, monitor your credit card balance. Avoid using too much available credit. Search for credit report inaccuracies, as they can affect your score.
Apply for a Mortgage With Bad Credit in Ontario
While traditional banking institutions may turn you down for mortgages because of bad credit, we provide other options to get you the financing you need.
Co-Signer: Co-signers assume legal responsibility if you default on payments. When they sign on to your loan, they provide backup, easing a lender’s risk. Therefore, your application stands a better chance of approval.Guarantor: Guarantors share mortgage liability. However, lenders only bother them for payments once other money collection methods are exhausted.B-Lenders: These are alternatives to traditional lenders. They have relaxed mortgage qualifications and are more apt to accept subpar credit scores. However, they do charge high interest rates.Private Lender: Private lenders have fewer qualifications than B lenders. You may still qualify for a mortgage even if your score is under 600. Private lenders look more at home equity and income instead of credit scores. They don’t observe government regulations, and approvals are quicker.
The Canadalend Advantage: Cover All Your Financial Needs
Why should you choose Canadalend.com over the country's Big Banks? Simply put, the experts at Canadalend have access to a much larger pool of banks and alternative and private lenders. This allows us to find the best possible product for your unique situation at the best rate–unlike banks and traditional lenders who can only sell you their specific products.
At Canadalend.com, we are dedicated to 5-star customer service. Get in touch with us and a lending specialist will help set up an appointment for a free personal consultation. We will help you review your mortgage options and find the solution that fits your needs!
If you want to book an appointment with our knowledgeable staff, contact us at 844-586-0713, info@canadalend.com, or visit our website here.