How Bad Credit History Affects Your Mortgage Options

What is Credit? Each person in Canada has a credit score and a credit history. Credit scores range from 0(meaning there is not enough credit history to make a report) to 850, which is considered perfect credit.

What is Credit?

Every Canadian citizen has a credit score and credit history. Credit scores range from 0-850, which is regarded as perfect credit.
Credit scores are used by lenders to determine how risky it would be to lend money to you.
Someone with a high credit score is more likely to pay off any debts they have quickly.
Lenders will gladly provide funds to someone with a credit score of 750 or higher and up into the 800s.
Poor credit is considered a liability for lenders, while no credit poses an even bigger risk.
If you have bad credit, you may find it difficult to get approved for a mortgage.
Lenders don’t want to take the risk of lending money to someone who doesn’t have a proven history of paying off their debts.
In addition, bad credit can affect your ability to qualify for certain types of mortgages or loan terms.
For example, someone with bad credit may be limited in the amount they are able to borrow or qualify for a higher interest rate than those with better credit scores.

However, there are steps that you can take to improve your credit score and repair any negative marks on your credit history. To start, you should do everything you can to pay off any outstanding debts as quickly as possible. You should also work on building up a good credit history by making all of your payments on time and keeping your balances low. Finally, you can use a credit repair service to help you improve your credit score.

While bad credit can make it more difficult to get approved for a mortgage, it is still possible to find lenders who are willing to work with you.
By taking steps to improve your credit score and working with a reputable lender, you can get the mortgage you need despite having bad credit.

What Makes a Bad Credit History?

You may be confused by your credit score. Why is it so low? What is making my credit history so bad? There are a few key places to look for answers. If you have a lot of debt, lenders perceive you as a risk, and your credit score will suffer. When was the last time you paid your phone or credit card bill on time? These late payments are also lowering your credit score.

If you have ever declared bankruptcy or had a vehicle or house foreclosed, this will also be reflected in your bad credit history.

Do I Need a Good Credit Score to Get a Mortgage?

A high credit score is not always necessary to get approved for a mortgage, but it can help you get better terms. In general, the higher your credit score, the more options you will have when it comes to mortgages.

If you’re interested in buying a home but don’t have perfect credit, there are still plenty of options available to you. Some lenders may require a co-signer or down payment, but you can still qualify for a mortgage with bad credit. This will help increase your chances of approval and could also save you money in the long term.

If you’re struggling with bad credit and considering buying a home, there are steps that you can take to get back on track. By taking measures to improve your credit score, paying off debts, and working with a reputable lender, you can get the mortgage that you need despite having bad credit.

How Bad Credit History Affects Your Mortgage Options

Your poor credit score could be affecting your ability to buy a home and here’s why.

Fewer options

Because you are seen as a more risky borrower, you might have difficulty obtaining a mortgage directly from lenders.

Higher rates

You may need to pay higher interest rates than other borrowers for the same exact mortgage rate.

Need insurance

You can improve your chances of being approved by picking up mortgage insurance. This type of insurance can help cover your monthly mortgage payments in the event you cannot. Just because you have bad credit doesn’t completely eliminate your chances of obtaining a mortgage. There are merely a few extra steps and considerations you have to make.

What to do About Mortgages When You Have Bad Credit

When you have a bad credit, or a rocky credit history, and need a mortgage, it will be more challenging to find a lender that is willing to loan to you. Luckily, you can make this process a lot easier by using a mortgage broker. Certain brokers specialize in finding their clients the right mortgages despite having bad credit. These specialized bad credit mortgage brokers have extensive knowledge when it comes to maximizing your mortgage value despite the bad credit. HDR works in tandem with a debt settlement lawyer who can actually reduce the amount of debt you need to consolidate and repay.
Have bad credit? Contact the HDR team and let our consultants secure you the funds and rates you need and deserve! You can get pre-approved the same day and receive your funds the very same week.

Share the Post:

Related Posts

What is a HELOC?

A home equity line of credit, or HELOC, is a loan that uses the value of your home as collateral. The loan is approved as a line of credit, meaning you can borrow up to a certain amount and only pay interest on the amount you borrow. The interest rate is usually variable, meaning it can change over time.

Read More

Debt Consolidation Programs

If you are struggling with debt and looking for a proven solution, consider enrolling in a debt consolidation program. These programs offer customized debt relief solutions that take into account your unique financial circumstances and help you find the best path to debt freedom.

Read More