Tips for Securing a Mortgage with Bruised Credit
Tips for Securing a Mortgage with Bruised Credit
If you do have bruised credit and are looking to purchase a home in the near future, don’t give up hope just yet. There are several steps you can take to improve your chances of obtaining a mortgage when your credit score isn’t ideal.
Work to Improve Your Credit
The best way to improve your chances of securing a mortgage is to work towards repairing your credit. This can be done by:
- Not procuring any additional credit
- Paying off your credit cards
- Not missing any debt payments
- Getting a secured credit card
- Not maxing out any credit cards or getting too close to the limit
- Increasing your credit limit but not using any newly available credit.
Correct Errors on Your Credit Report
Credit reports aren’t always 100% accurate, so it’s important to review yours carefully to ensure there are no inaccuracies.
Here are some examples of mistakes that can appear on your credit report:
- Someone made a mistake when entering your name or address
- Loan or credit card payments may have been accidentally applied to the wrong account
- Some accounts may have been reported more than once, making it seem as if you have more debt or open lines of credit than you actually do
- Falsely showing that an account closed by you was closed by the creditor
- Older bad debts that should have been removed from your credit report were not taken off
- Unverified accounts and bad debts due to identity theft
If you spot any mistakes on your credit report, it’s crucial that you contact the credit bureau – either Equifax Canada or TransUnion – to dispute the information. You will need to have receipts, statements, and other documents related to your credit accounts to help support your case. An investigation will be launched to determine the validity of your claim before your credit report is updated.
Save For A Sizeable Down Payment
Borrowers with strong credit can put as little as 5% of the purchase price as a down payment. Borrowers with bruised credit on the other hand are considered higher risk and will often be asked to put down as much as 20% in order to secure a loan. While this means you may have to wait a bit longer to save up enough money to buy a home, the upside is that you will end up with more home equity.
Find Stable Employment
Employment history is another big factor that lenders consider when reviewing mortgage applications. In fact, household income often weighs just as heavily as credit score, as lenders want that extra assurance that borrowers have the capacity to pay them back and won’t default on payments.
Therefore, if your income is considered “confirmable” through the Canada Revenue Agency’s notices of assessment, your chances of securing a mortgage will improve. However, even if you have “unconfirmable income,” rather than postponing buying a home, talk to our 911 Mortgage Brokers and Agents about borrowing from an alternative lender and then refinancing to best rates and terms in 12-24 months when your income is more stable.
Consider An Alternative or Private Mortgage
If you are still unable to obtain a traditional mortgage through your bank, you may want to consider an Alternative or Private mortgage.
Private mortgage lenders are often individuals lending their own money or a small group of investors, and are usually not as strict as banks when it comes to lending money. Since they are not required to follow the same rules as banks, they have more discretion and flexibility when it comes to lending guidelines and the ability to set their own rules and restrictions. This means they are often more willing and able to offer loans to borrowers deemed high risk by traditional banking and financial institutions.
Why Work with 911 Mortgage Brokers
We understand that difficult situations arise in life which may wreak havoc in a person’s financial situation resulting in a consumer proposal or a bankruptcy. This is where an experienced mortgage broker comes in and can make all the difference. Our 911 Mortgage Brokers have the expertise and know-how to deal with these situations, swiftly and efficiently, to provide the right mortgage solution. We are known for providing out-of-the-box creative solutions.
Here at 911 Mortgage Brokers we specialize in assisting clients with less than perfect credit, including clients who are still enrolled in consumer proposals and bankruptcies. Our lenders understand the importance of common-sense approvals. With this in mind, they place little to no emphasis on income or even past credit issues. To clarify, they approve mortgages and home equity loans almost exclusively on the amount of equity you have in your home.
So, whether it is a mortgage for home purchase, a mortgage renewal, a refinance, a home equity loan, a home equity line of credit, a second mortgage or a private mortgage, we have the tools and knowledge to secure the right financing solution for you.
Because we work with a large pool of lenders nationwide including traditional Banks, Credit Unions, Alternative Mortgage Lenders, Mortgage Investment Corporations, and Private Lenders, we can explore a wide array of mortgage solutions for you.
Call Us Today at 289-318-0911 or Toll Free at 1-888-377-0911 for a free confidential consultation to discuss your options.
Our Service Areas
911 Mortgage Brokers – The Mortgage Centre offers services to clients across Toronto and the GTA, Vaughan, King, Aurora, Stouffville, Newmarket, Markham, Richmond Hill, Barrie, Innisfil, Orillia, Collingwood, Oshawa, Ajax, Whitby, Mississauga, Brampton, Caledon, Burlington, Oakville, Milton, Bolton, Hamilton, St. Catherines, Niagara Falls, Windsor, Kitchener, Waterloo, London, as well as far as Muskoka cottage country, Ottawa, Simcoe, and the rest of Ontario.
