Can I Get a Home Loan With Bad Credit?
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According to the Toronto Real Estate Board, more than 113,000 residential dwellings were sold during the calendar year of 2016. Not all of those sales were due to buyers with excellent credit. If you think there is no way you could be approved for a mortgage, think again. There are lenders who will work with you in spite of those lower scores. Here are some of the ways you can improve the odds of being approved even if your credit is not the best.
Taking a Look at Your Credit Reports
The first thing you should do is take a good look at what led to your current credit score. Lenders who are willing to approve mortgages for those with less than perfect credit often look at the details and not just the score. Knowing what type of comments are on your credit reports will help you be prepared to answer any questions lenders may ask.
Keep in mind that not all your creditors report to the same credit bureaus. Couple that with the fact that you don’t know which of those reports a given lender will consult and it becomes clear why you need to look at your rating and information on all three of the major bureaus.
Remember that if you see information on your reports that is outdated or incorrect, now is the time to see about making corrections. Doing so could boost your score and make it easier for the lender of that bad credit mortgage in Toronto to approve your application.
If possible, pay off credit cards and other debt that is currently showing as active on your credit report. This helps in two ways. First, less debt means more of your monthly income is free to allocate to a home loans, property insurance, and other things that make mortgage lenders happy. Second, paying off those balances means more positive comments on your credit reports. Lenders are more likely to view you as someone who is working hard to restore your credit and worth the risk of approving the loan.
Many lenders who specialize in bad credit mortgages place greater emphasis on steady sources of income. That could be income from the job that you’ve held for several years. If you are self-employed, it could be accounting reports that show you consistently generate a certain amount of collected revenue each month.
The point is to have documentation on hand that verifies your income and proves you have the means to make those mortgage payments on time without fail. That sort of reassurance will go a long way in helping you lock in the best terms and conditions.
Even if you are sure now is the right time to consider buying a home, talk with a lending expert. There are more financing options that obtaining a personal loan from a friend of relative. You may be surprised to learn that your current credit score will not cause all lenders to turn away and that several are willing to help you buy the home you’ve always wanted.