31 Jul

How to Refinance your Mortgage with a Bad Credit Score

Mortgage Tips

Posted by: Brent Adair

Refinancing is when you replace your current mortgage with a new one, majority of the time the new one will have a lower interest rate. There are plenty of reasons why anyone would investigate refinancing their mortgage. For those that have a good credit score, this is a straightforward process. However, when it comes to refinancing when you have a poor credit score, it can be a little more difficult.


How Does Credit Score Affect Refinancing?

Before you get you can refinance your loan, lenders will look at your credit history. They will look at your payment history, money that is currently owing, the amount of time you have had credit history and what you are applying for.


Typical Refinancing Process

When you are looking to refinance, the first step is all about choosing a lending institution. You should shop around for deals during this process. Once you do find a suitable lender you’ll need to provide them with bank statements, credit history, past tax returns and other documents. The lender will then assess if you are able to repay the loan or not.


Tips for Refinancing with Bad Credit

Here are some steps you can take:

  1. Have some significant assets on hand. By having some substantial holdings on hand, the bank will a little more forgiving of a low credit score.
  2. Find a co-signer. By having a co-signer with a high credit score, this will reduce the amount of risk on the bank’s end and will more than likely to approve your loan. It should be noted that if you are unable to pay your loan, the bank will get the money from the co-signer.
  3. Boost your credit. By clearing as much of your credit card debt as possible and paying your bills on time, you have the potential to raise your credit score by about 50 points within a couple of months.

Whatever the reason for refinancing, don’t let bad credit stand in your way. With the information in this blog, you too can help to improve your credit and be on your way to refinancing your mortgage.


31 Jul

How Private Lenders Can Help Get You a Mortgage

Mortgage Tips

Posted by: Brent Adair

Can’t Get a Bank Mortgage?

Not everyone can qualify for a mortgage these days. Government regulations have been clamping down on the ability to qualify for a mortgage. Self employed individuals and those with past credit issues have in the past struggled with mortgages and getting approved through banks. More and more Canadians are now turning to private lenders for their financing needs. Although many borrowers often see private mortgages as a last resort, they are a viable option for many people.


Private Mortgage Lenders Operate Differently Than Banks

A private mortgage is simply a home loan offered by an individual or company other than a bank or traditional finance provider.

Since private lenders operate differently compared to traditional banks, this is one of the benefits of working with them. Since they get their money from individual or private investors, they have the freedom to set their own criteria for lending. This means that during the application process they are more flexible and aren’t dealing with the stringent guidelines set out by major institutions.

Private mortgages are suitable for:

  • Self employed
  • Want to purchase raw land or a unique property
  • Have less than ideal credit
  • Want to invest in real estate
  • Need to consolidate high interest rate debt
  • Looking to renovate an existing property
  • Looking for a short-term loan


How Private Mortgages Work

If you are looking to explore a private mortgage, the first step is looking for a broker that provides alternative lending solutions. The broker will assess your situation and determine if you are eligible for a loan. They will also determine if you are able to make your loan payments on time.

The broker will then search for the best mortgage solution that meets your needs. They will then structure and create a deal that also creates an exit strategy, so that you know how long the deal will last.

Private lenders will usually lend on location, as private mortgages are uninsured. This means the lender falls back on the property if a default were to occur. That is why the location of the property is extremely important when it comes to a private mortgage and the rate you will be given.

Broker fees and legal fees generally apply when securing a private mortgage.

Private mortgages are growing in Canada as more borrowers are falling outside of the traditional lending guidelines put in place by major banks. There are plenty of options available when it comes to looking for alternative lending solutions.