Getting a Mortgage in Ontario with Bad Credit
If you have bad credit, you might feel like home ownership isn’t possible for you. However, that isn’t necessarily the case. You might find that the options for getting a bad credit mortgage are limited, but this doesn’t mean that you’ll have to give up the dream owning a home.
But it does mean that you’ll need to do some research, have some discipline and do some planning.
For many people, it often makes sense to wait at least two years after you have been discharged from a bankruptcy or a consumer proposal before you look for a home loan. If you wait this period, and have a stable job and an income, you will find that there are more options available for home loan with bad credit to you.
However, if you wish to get a mortgage sooner or if your bad credit rating isn’t related to a bankruptcy or a consumer proposal, there are still options.
It’s possible to get a home loan in Ontario even if you have bad credit. Here are some tips for getting a home loan with bad credit.
Bad Credit Home Loan Options
The best way to get a bad credit mortgage is to go through a mortgage broker. The broker will assist you and make sure that you have all of the financing requirements and documents that you’ll need in order to get a home loan with bad credit.
However, it’s important to note that getting a mortgage when you have bad credit can often be more expensive than a regular mortgage. When you work with a mortgage broker, you usually end up paying them a fee. In addition, if you have bad credit, you will probably receive a higher interest rate on your mortgage as well. While people with good credit can often get mortgage rates below the prime rate, someone with bad credit will likely have to pay more.
So how can you lower the amount of interest that you will be expected to pay on your mortgage?
If you can show that you have a history of successfully paying down debt, you may receive a lower rate. Lenders like to see that a person has been able to borrow money and successfully repay it in the recent past.
There are a number of ways to show that you are able to successfully pay down debt. They include:
- Paying rent, utilities, cell phone bills, etc. for at least six months to a year.
- Paying down credit cards and car payments.
- Receiving a bad credit loan and successfully paying it down.
There are a few different types of bad credit loans that you can use to rebuild your credit and show lenders that you are able to successfully pay down a debt. These include car title loans and other secured loans. Avoid payday loans and other similar loans that come with very high interest rates and added fees, however. These can put you in an even worse financial situation very quickly.
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