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How To Get a Mortgage If You have bad credit?
What is considered bad credit?
Bad credit is considered anywhere from 300-640
Can you get a mortgage if you have bad credit? Yes you can and I will be sharing exactly how to do this in this video. If you do hhave bad cred, please make sure you contact me if you are applying for a mortgage, as I specialize in this financing an have around 40 different things I do to assist a person to get into their mortgage.
Hook: at the end of this video, I will share a secret you need to know about getting a mortgage with bad credit, the make it or break it deal.
How to get a mortgage if I have bad credit?
- Dispute your credit with the credit bureau to repair your credit fast
- Have 20% down or more to put down on a mortgage
- You do not need to have a job
- Remove a spouce with a high debt loa or really bad credit
- Get a cosignor
- Try a different lender
- try a different credit bureau
- Have a really good explanation for the bad credit (death of spouse etc)
- Try to get more credit
- Work with a mortgage broker that knows
What is the lowest score a bank will consider? A standard bank will consider doing a loan for a pereson with a score as low as 600. However if you have a score from 600-650 there has to be a good reason for it. Most banks will not do a mortgage for someone with a score below 650.
What credit bureaus do the banks use for mortgages? The main credit bureau for mortgages is equifax. However transunion is also considered by some banks.
What types of banks will accept a person with bad credit? There are 2 types of financial institutions that accept bad credit. One being the “B” lenders. Some regular banks have “B” divisions that can assist you. You should always work with a mortgage broker if you plan on shopping “B” lenders as tthey can get you the lowest rate.
The second option is private lenders: These are companies that get thoir money from investors. The investor expect a specific rate of return and the private company will try to get the max interest rate out of a customer.
How much do B Lenders cost: A B lender will charge a fee usually anywhere from 1-3% of the financed amount.
How much do Private lenders cost? A Private lender will charge a fee of usually 2%-4% of thhe financed amount.
What is the interest rate with a “B” Lender? B Lenders generally charge around 1% higher than the regular banks charge.
What is the interest rate with a private lender? The interest rates with private lenders are usually 3-10% higher than the standard banks.
How much do I need to put down as a downpayment if I have bad credit? If you are in a major municipality, you will have to put down a minimum of 20% on a single family home and most likely 25% down on a condo.
How can I lower my payments with a B” lender or private lender? There are a few options to lower payments including requesting interest only payments. This is where you would not be paying the house off at all, only paying the interest. I recommend only doing thhis short term. Anothher great way to lower interest is to extend thhe ammortization (or the time it takes to pay the mortgage off) You can do up to 40 yr terms with these lenders.
Is it safe to finance throughh a private lender? Yes I would say it is safe in most cases. Make sure you read all of the terms and conditions and also make sure you are dealling with a reputable company. NOT an individual.
Warning: Most mortgage brokers do not fully understand how to help you if you have bad credit. The private mortgage world and B lenders is a very complex learning curve and if a lender has not dealt a lot in this area of financing, they can make it even harder for you to get approved. Always call me if you find yourself in this situation, as I do specialize in high risk or bad credit lending.
Check ouut my other videos on how to repair your transunion and equifax credit bureaus
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Sean Rampersaud
Sean has been a mortgage broker in Canada for 17 years.
We have helped countless amounts of clients achieve their mortgage goals!
Call me anytime at 780-278-4847
