Can I Still Buy a House with Bad Credit?
Many Canadian dream of one day owning a home to raise their families in. But for those with low credit scores, this dream can seem out of reach. The good news is that even if your credit isn’t great, it is still possible to buy a house. Bad credit mortgages (also known as high risk mortgages) have higher interest rates than traditional mortgages but they also tend to have shorter terms. This means that if you have a plan to rebuild your credit, you can use a bad credit mortgage as a short term solution and when your financial situation is more stable, you can switch over to a mortgage with a better rate.
What should you do if you are looking for a bad credit mortgage?
There are many reputable B lenders and private lenders in Canada that can help you purchase a home even if you don’t have great credit. To find the lender that is best for you, it is a smart idea to work with a mortgage broker. They have contacts for these lenders and they know the good lenders from the bad!
The next thing you should do is save up for a larger down payment. This will not only increase your chances of qualifying for a better rate, but it will mean that your monthly or bi-weekly mortgage payments will be lower as well.
Finally, once you are approved for a bad credit mortgage (or earlier if possible), you should start taking the necessary steps to improve your credit. This may involve finding more stable or higher paying employment as well as working on your credit score.
To improve your credit score, you should get a copy of your credit report and review it carefully. If there are any errors which are negatively affecting your credit, you should contact the major credit bureaus (TransUnion and Equifax) and have those corrected. Additionally, you should make sure that you are paying your bills on time each month and not running up additional consumer debt if you cannot afford to pay it off. In this way, your credit will gradually begin to improve and that will help you qualify for better rates and terms when it is time to renew your mortgage.
If you are interested in learning more about bad credit mortgages or would like to apply for one, contact Matrix Mortgage Global today!