24 Jul Can You Get A Home Purchase Mortgage With Bad Credit?

Applying for a mortgage can be a hard process with various constraints. Bad credit can complicate your application, but it does not prevent you from getting a mortgage. 

Knowing what influences your credit score when applying a home purchase mortgage in Abbotsford might help you understand how it is calculated and what it means for your financial future. When you have negative credit, it is generally linked to how much debt you have accumulated. 

Having bad credit and debt limits your alternatives but does not eliminate them. To qualify for a mortgage, many banks and lenders require a credit score of at least 680. This is considered a reasonable score. Anything below 680 is considered a bad credit. 

Mortgage Options For Bad Credit Borrowers

A credit score below 680 may limit your chances for obtaining a mortgage. Apart from banks, some private lenders are prepared to lend to those with low credit scores. It should be noted that locating a private lender may take more effort and will almost certainly result in a higher interest rate.  

If you have bad credit, you may be classified as a high-risk lender. As a result, you may be requested to deposit a larger down payment. Bad credit can mean that you can borrow at a considerably greater interest rate than people with fair or good credit. 

Other than banks, you can rely on private financial institutions, private lenders, mortgage brokers, mortgage investment corporations, REITs, and among many other borrowing options to get the funding you need to buy a residential property. 

How Will Bad Credit Affect My Mortgage Application?

The approval of a mortgage will depend on a number of additional variables, including:

• The amount required for the loan: The lender’s level of risk will depend on the amount of money you are asking for.
• Your debt management history: you will be penalized if you have a history of missing or repeatedly late payments.
• The goal of the mortgage: the lenders will examine the property you wish to buy and take your purchasing objectives into account.
• Employment history: In addition to debt-to-income ratios, a lot of lenders look for evidence of consistent income and employment since these factors suggest a higher likelihood of loan repayment. 

If possible, rebuilding your credit or saving more for a larger down payment before applying for a mortgage can be more manageable in the long run. It can be challenging to comprehend all the ways you can obtain a mortgage, since they depend on your credit history and other requirements. 

In case, your credit score is not good enough to get your mortgage approved from the bank, contact our Abbotsford mortgage broker. Satbir Bhullar is your trusted mortgage consultant assisting borrowers in getting approved for a quick mortgage at a competitive interest rate, no matter what your credit score is. For more details, feel free to contact us.