What Bank Will Loan with Bad Credit?
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If you are in the market for bad credit mortgages in Toronto but you do not know where to turn due to your poor credit history, you might be surprised to learn that many banks will provide you with a private home loan. If your personal bank denies your loan, do not give up.
Just because your own personal bank will not finance bad credit mortgages, this does not mean that all banks refuse borrowers due to bad credit. Many banks in the Toronto area look at other factors, too. For instance, if you have poor credit but you have an excellent work history and a stable income, some traditional banks may be willing to provide you with a bad credit mortgage in Toronto. Be sure to bring copies of your paycheck stubs and bank statements, and expect to come up with a large down payment. If you have these things when you speak to a loan officer, you may have a chance.
If you do not have any luck with traditional banks, you might want to try some of the credit unions in the area. In fact, they often provide bad credit mortgages in Toronto and even second mortgages in Barrie when other banks turn borrowers down. Credit unions work differently than banks in that they are non-profit agencies, so it is often easier to get loans with lower interest rates. Most credit unions will not give loans to non-members, though, so consider switching your business to a credit union for six to 12 months before applying for a loan.
IPrivate lenders are a bit difficult to find, but the good news is that you can locate several in your area with a simple Internet search. Although the majority of these lenders focus on short-term loans such as installment and payday loans, some are willing to provide mortgages, too. Expect to pay a high interest rate of up to 18% or more on these loans, and expect to come up with a large down payment of up to 20% of the total value of the loan. These things help the private lenders mitigate their risks.
When All Else Fails
If you still cannot find a lender willing to provide you with a bad credit mortgage in Toronto, you will need to improve your credit score. There are several ways to go about doing this, but one of the best involves debt consolidation. You can contact numerous Canadian agencies that, for a fee, will contact your creditors and negotiate affordable repayment. You may choose to make monthly payments divided between the creditors, or you may even qualify for a debt consolidation loan, allowing you to pay off your creditors and improve your credit score quickly.
Plenty of banks will provide a bad credit mortgage in Toronto, but it is important to remember that every situation is unique. If a bank turns down a friend or family member due to bad credit, this is no reason for you to avoid applying. After all, your income and employment history may make you the perfect candidate.