If you’ve had financial troubles in the past or have a poor credit rating, it does not necessarily mean a mortgage for a new home is out of reach. Life happens – we get it. We’re here to help find you a solution.
The truth is, bad credit mortgage approvals are becoming more and more common as the mortgage market becomes more competitive. But regardless of your circumstances, there is always a solution. Mortgage brokers have direct connections with hundreds of different lenders willing to lend to people with all kinds of financial history and circumstances. We can help you chart a course to a new home through a new mortgage, helping build a new future.
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Getting Approved
To get started any lender considering a bad credit mortgage application will assess the applicant to determine the level of risk.Every bank or lending agency has its own set of criteria to determine if an application should be approved. Some of the most common requirements for approval are listed here:
A Higher Down Payment – With a perfect credit rating most lenders will require at least 5% down on a new home purchase. If you have a bad credit rating that figure can jump to 15%, and the thing to remember is the more money down you provide, the better your chances for approval.
Proof of Income – In order to qualify for any mortgage the borrower needs to provide proof of income, to prove they have the ability to pay off the loan. Lenders usually use a formula called a – Gross-Debt-Service-Ratio ( GDSR ) to determine how much of your monthly income will be used to service the mortgage. While many lenders will approve a bad credit mortgage with a GDSR of about 35%, it is recommended that home buyers keep their GDSR below 30%. This is basically the percentage of your income that needs to be used to make the payments on your mortgage every month.
Professional Property Appraisal – If you default on your loan, the lender will have the legal right to take control of the property and sell it to recover their money. That’s why the lender will require a professional appraisal. They need to be sure the property is worth more than the amount of the mortgage.
A Co-Signer – If you have bad credit a lender is much more likely to approve a mortgage if you have a trusted friend or relative who is willing to cosign for you. Having a reliable co-signer reduces the lender’s risk because if you are unable to make payments, the cosigner will be required to.
No matter your situation – if you have bad credit, or no credit – our experts will work with you to help find a solution and secure a future for you and your family.
Contact us to be assigned an experienced mortgage broker. They’ll review your situation and provide a personal, no obligation consultation. Let us work for you. 1-866-941-6678
