If you have bad credit, that might stand in the way of you getting approved with a conventional lender in Canada. That said, there are other options available for bad credit consumers.
Get a cosigner. If you can find someone with a good credit score who is willing to sign on as a cosigner on your mortgage, you may be able to secure a home mortgage loan. A cosigner basically promises to take over payments if you ever default on your mortgage. It’s a big responsibility to take on, so it’s important that both you and the cosigner you choose understands what’s at stake.
Work with an alternative lender. There are plenty of lenders available in Canada to deal with borrowers with bad credit. These lenders have different lending requirements than conventional lenders in Calgary and focus more on other factors, including income, assets, down payment amount, and total debt load.
Interested in the alternative mortgage options available? Check out this.
Calgary borrowers should be aware, however, that be interest rates charged are often higher than what conventional lenders offer to those with a good credit score.
Take time to improve your credit score. If you’re not in a rush to buy a home, you might want to make the effort to improve your credit score. That way you’ll have a much better chance of getting approved for a mortgage. Consider taking the following steps to improve your score:
- Make all payments on time
- Pay down your credit card debt
- Keep your credit card spending to less than 30% of your credit limit
- Don’t close out old credit accounts
- Don’t apply for many loans in a short period of time.
New, new, new! Find out if this option is for you. Most importantly the only hard part is the down payment. If you can come up with 20% to put down, you might just have an approval.