Is your credit history not the best? Are you riddled with debt that has severely impacted your credit score? Are you looking to buy your dream home even with bad credit? Don’t worry, the agents at AKAL Mortgage can help with that. We can help find the right mortgage lender who specialises with customers with a poor credit history and clearly understands your situation. Below mentioned are a few steps to consider when applying for a loan with bad credit:
- Check your credit report
This should be the first thing you do. You should check your credit report and identify the credit issues. This will give you a clear idea of what mortgage lenders you can approach. They will show all your past loans, overdrafts, and credit card bills. You can stay up-to-date and rectify any potential mistakes by analyzing your credit report.
- Carry out a credit repair and raise as much deposit as possible
To prepare your mortgage application, you should optimize your credit rating, including minimizing risks that can affect your credit score. Additionally, it is also a fantastic idea to raise as much extra deposit in this stage, because it can offset some of the risk involved.
- Try to avoid multiple credit searches
Approaching a traditional lender like a bank or creating multiple mortgage applications online for a bad credit loan has a higher chance of your application being rejected. This is because not all customers with bad credit are considered for a mortgage, and with traditional lenders having stringent protocols, it is difficult for bad credit loan applicants to get their applications approved.
- Find a reliable broker that specialises in bad credit mortgages
The best way for an individual to get a loan with bad credit history is through a broker who has built a sound relationship with several lenders. You can rest assured; that they will identify the deal that is more favourable to your financial situation. Below mentioned are what you should look for in a mortgage broker:
- Gives you access to direct deals
- Sells exclusive mortgage products
- Wealth of experience
- Reasonable and unbiased
- Highly recommend from previous clients
At AKAL Mortgage, our mortgage brokers have all of the above-mentioned qualities and have built up a strong track record over the years for helping clients with a bad credit history.
Schedule an appointment with the bad credit mortgage experts today!
If you have any kind of bad credit, it can be difficult securing a mortgage, and the chances of getting your application approved by a lender are low. However, it is not all gloom and doom, few lenders offer mortgages to individuals with a poor credit score. At AKAL Mortgage, we can help with your mortgage despite your credit problems. You’d even be surprised with the rates we can secure for you. Please do not hesitate to give us a call and discuss your specific requirements with our professional and friendly team.
Can I Get a Mortgage With Bad Credit in Toronto?
Many people share the dream of owning their own home. But, for some, that dream feels out of reach. This may be an issue if you’ve had trouble with your credit score in the past. Don’t lose heart, there is hope. Though it is more difficult to secure a mortgage with adverse credit, it is not impossible. We are here to help you recognize your dream!
If your credit score is less than ideal, there are a few things to consider when you’re looking to buy a home. With a little knowledge and effort, you can put yourself in a better position for being approved.
Credit Score – It’s important that you know what your credit score is and understand the implications. It is based on the past 6 years, so, if you’ve had issues before that time, you have a fresh start. Lenders will take into consideration several factors: your score, outstanding debt, and time frame. If you’ve had bad credit in the past but have been working to improve it, that will be recognized. Adverse credit in the past 12 – 24 months will lessen your options and likely mean higher rates and a larger down payment.
Other Debt – If you have other debt, work at paying it off. Not only will this put you in a better financial situation but it will improve your credit score. Lenders will see you as a higher risk if you owe money to a number of lenders. To put your best foot forward, pay off all other debt. This may take some time so you’ll need to be patient. It will be worth it in the end.
Mortgage Broker – Working with a mortgage broker will give you access to subprime and private lenders. A broker will also understand the mortgage requirements and be able to make recommendations based on your particular situation. Their expertise can help you discover options you may not have realized otherwise.
Down Payment – It is always a good idea to save for a down payment. However, when your credit is poor, a larger down payment will be a necessity. Lenders will require a sizable down payment to offset the risk. Although it can seem like an unattainable goal, saving up 20% for your down payment will be a benefit to you. Not only will it help you secure a mortgage but the more you pay upfront, the less you’ll need to finance. That equates to smaller payments or a shorter term.
Stable Income – Lenders will also consider the stability of your income and the length of your employment history. Choosing to lend money to someone with a steady paycheck that has worked at the same company for 7 years is much different than lending money to someone with irregular work. Your employment history can really work in your favour. In addition, if you have a side hustle and can prove income from freelance work, that can also work to build your case.
Co-Sign – If you’re concerned about being approved, you could consider having someone co-sign a mortgage with you. This person should have excellent credit which will be considered as part of the application. It is important for this person to understand the implications of co-signing a mortgage. In the event that you default on payments, they will be responsible for the entire amount of the loan. So, having a frank discussion about the agreement is imperative.
There is a bit of work to do but if owning your home is important to you, we can work with you to come up with a solution. The good news is, the longer you make payments on your mortgage, the better your credit will become. When it comes time to renew your mortgage you will be in a much better position. If you’re unsure of your credit rating and if you would be approved for a mortgage, book an appointment today. We can help you crunch the numbers and find an option that works for you.
3 Benefits of Getting a Bad Credit Mortgage
If your credit is less than perfect, you may think that it is not possible to get a mortgage. Or you may think it best to work on improving your credit before you apply for a mortgage. But the fact is that there are a number of lenders out there who specialize in bad credit mortgages and it may be in your best interest to get one.
The following are three benefits of getting a bad credit mortgage:
- Improve your credit.
Did you know that getting a bad credit mortgage can actually help you to improve your credit score? By getting a loan such as a mortgage and making your regular payments in full and on time, you can gradually begin to repair damaged credit.
If you are diligent in making your payments, then by the time the term for your bad credit mortgage is up, you may be able to qualify for a traditional mortgage.
- Stop renting and become a homeowner.
Why rent and put money in someone else’s pocket, if you can qualify for a mortgage and purchase a home of your own. Instead of rent payments, you’ll be making mortgage payments, but you will be paying for something that is yours.
Over the last several years, homes have become more expensive and they are only likely to continue going up in price. The sooner you act to become a homeowner, the more affordable it is going to be.
- Start building equity.
As you pay down your mortgage and as your home increases in value, you will start building equity in your home. And home equity is something that you can borrow from in the future. There are a number of mortgage products that allow you to borrow from your home equity including home equity lines of credit, second mortgages, and mortgage refinancing.
Your home equity can become a valuable source for helping you to finance large purchases and products such as a new vehicle or home improvement project, or it can help you with debt consolidation.
Contact AKAL Mortgage today!