It can be difficult to find a lender willing to work with you when you have bad credit. You may also feel that getting a mortgage is simply out of reach. However, having bad credit doesn’t mean you are barred from owning your own home.
There are private mortgage lenders in BC who specialize in mortgages for people with bad credit who can help get homeownership back within your reach once again.
Here are some tips on how to get a mortgage with bad credit:
- Have a good credit history
Even if you have bad credit, having a good credit history can work in your favor. Make sure you always make your payments on time and keep your debt levels low. It will show potential private lenders in BC that you can manage your finances responsibly.
- Have a down payment saved up
Lenders are more likely to work with you if you have a significant down payment saved up. It shows that you are serious about purchasing a home and invested in the process.
- Shop around for lenders
There is no one-size-fits-all solution when it comes to mortgages. Lenders offer different rates and terms, so it’s important to compare your options to find the best deal.
- Consider a subprime mortgage
Subprime mortgages are designed for people with bad credit. They come with higher interest rates and more stringent terms, but they can still get you into the home you’ve been dreaming of.
- Ask about more flexible underwriting processes
When you have bad credit, some lenders may be more inclined to use additional criteria when determining your eligibility for a mortgage. For example, they might also consider your employment history and cash reserves in addition to your credit score.
Mortgage rates for subprime lenders are typically higher than rates for conventional mortgages, but you might be surprised at the options available to you. It’s always best to consult with a mortgage broker first so they can advise you on your best course of action.
When it comes to bad credit mortgage loans, don’t give up. Some lenders are willing to work with you and help you get into the home of your dreams.
Factors to consider when looking for a lender
- Rates
The rates a lender offers may vary and be more expensive than a traditional mortgage.
- Terms
The loan terms may also be less favorable, such as requiring a higher down payment or having a shorter amortization period.
- Fees
The lender may charge additional fees, such as an application fee, appraisal credit, so it can be challenging to get approved for a mortgage with them.
- Turnaround time
Typically, it takes much longer to process loans through subprime lenders than traditional lenders.
Final Thoughts
Although it isn’t easy, getting a home equity loan or a mortgage with bad credit is not impossible. Some lenders specialize in this type of loan and can help you through the process. It’s always best to consult with a broker first to determine your options.
