Few things are more frustrating (and stress inducing!) than needing a loan and having traditional avenues closed to you because of bad credit. Traditional financial institutions will not think twice about denying an applicant with a bad credit score.
Bad credit doesn’t mean that you can’t get a mortgage in Brampton, Ontario. By hiring the services of a professional and experienced mortgage broker, you can still get the loan you need. It’s true that with a bad credit score, it’s very difficult to convince financial institutions to grant you a mortgage. And being denied credit because of a bad score does have a negative effect in your attempts to improve your credit score. But with a properly connected mortgage broker, one can still get a mortgage in Brampton.
The Brampton mortgage broker does this by tapping into its network of private lenders and financial institutions that give borrowers with bad credit scores access to the credit they need. It goes without saying that the requirements will be more rigid, with a tighter tolerance for red flags when it comes to background checks. The borrower will also have to expect a higher interest cost for the mortgage. Mortgages based off a bad credit score are typically short term, however. A good mortgage broker will continually help you improve your credit score, with the intention of moving your mortgage to a longer term one with a significantly reduced interest cost.
A good mortgage broker can also help with a bad credit score resulting from bankruptcy proceedings. Many financial institutions automatically reject applications based on such a history. The upside to passing these checks and repaying a more costly mortgage is that your credit score will improve. In addition, a good mortgage broker’s connections will include access to lenders who will give out a loan based on just the equity in your home.
In the worst case scenario where even lenders who specialize in bad credit deny your application, here are a few suggested ways to improve your credit score, with the intention of reapplying for a mortgage in the future:
- Use other sources to increase your downpayment to at least 20%. This will help lenders who are on the fence reconsider.
- Have a relative or really good friend become a co-signor for a mortgage. You have to be very responsible in undertaking this, because failure to pay the mortgage will also destroy a personal relationship.
- Undertake credit repair strategies that will help you with a future mortgage application. Your mortgage broker can give you sound advice on which strategy would be best to pursue.