Your chances are much better than you think!

We will match you up with variety of lenders who DO NOT use the same rules as the BIG BANKS

No excellent credit? Declined by a bank?

Did you recently experienced bad times? Come to us with your challenges and you'll be amazed at what we may be able to arrange for you: there are Alternative Lenders in today's market offering unique and innovative solutions.

We have the ability to find loans for those with damaged credit, recent bankruptcy or proposal, difficulty documenting their income. We work with lenders that provide the ability for borrowers who have been or who would be declined by prime lenders (like large banks) to obtain financing, either to purchase a home or refinance their existing mortgage.

Bad credit happens. Lenders typically won't make a mortgage loan to someone who simply doesn't care about paying anything back whatsoever, but they do like to make loans to people who have temporarily had some type of financial disaster in their lives.

Sub-prime market. Do not be pessimistic about your chances!

Lenders are interested in minimizing their risk when they make loans. The whole approval process for mortgages is to give the lender a clear picture of how likely it is that the loan will be repaid in a timely fashion. In most cases, if the risk is too high, the application is rejected.

But what if the borrower were willing to pay a higher interest rate in order to secure the loan? Would a lender be more interesting in taking the risk? The answer is the "sub-prime mortgage market" - loans that are less restricted by the prime market's underwriting (eligibility) standards.

The sub-prime market, available only through mortgage agents/brokers, has developed in Canada over the past several years in response to Canadians with specific mortgage financing needs. It provides the ability for borrowers who have been or who would be declined by prime lenders to obtain financing. This market has effectively increased the number of potential home buyers by providing financing that would otherwise be unavailable.

The typical sub-prime borrower is an individual who may have a combination of the following characteristics:

  • Poor credit score.
  • Small downpayment.
  • Less than two years at current job.
  • Self-employed.
  • Difficulty documenting the income.
  • Previous bankruptcy or recent (less than 2 years) proposal.
  • The mortgage is for a second (third etc.) property (financial risk of not-finding tenants).
While no single characteristic from the above list may be enough for a prime lender to decline an applicant's application for financing, a combination of those characteristics typically will result in being declined by a prime lender. It has therefore become necessary to provide potential borrowers with alternative financing, which is offered by sub-prime lenders. These lenders normally charge a higher rate of interest than their prime counterparts and may charge the borrower a lender's fee (normally, 1% of the mortgage amount). A lender's fee is a fee charged by the lender and paid on closing by the borrower, as a bonus for providing the financing in difficult situation. It can be paid from the mortgage proceeds, i.e. be added to the mortgage (for example, you can borrow 303K instead of 300K and pay nothing with cache on closing).

According to a study conducted by CIBC, sub-prime lending accounts for only 2.5 percent of Canada's total mortgage market. That number could be much higher if others tried to buy a home instead of not applying because of their own pessimistic assumptions about loan qualification.

Mortgages for those with bad credit – good for your financial situation

Adam Gardner,

Competition Brings Down Rates

So many folks nowadays have smudges on their credit histories, and so many traditional lenders are unwilling to lend to them, that private lenders have recognized a lucrative market and have stepped in to fill the gaps. As a result, an individual will be able to actually shop to find the best interest rates and most comfortable repayment terms. In fact, individuals may find themselves with more power to negotiate terms and conditions than in the past. The main fortifier of this system is that the property itself becomes a part of the security on the loan. Hence, the more money you can put down the more likely the lender will come through with a loan for you despite your bad credit.

The Old Renting vs. Owning Argument

If you are paying rather high rental payments every month just because you feel you do not have the personal financial strength to consider looking for a loan, you might be making a mistake. Of course, this has to do with your philosophy regarding home ownership, but financing a home with a mortgage for those with bad credit may be a good idea. You will be owning a home and at the same time improving your credit rating. Just paying rent on time is helpful for credit ratings, but not in the way paying a mortgage can be. Often, mortgage payments turn out to be less than rent payments.

Why Would Someone Grant Me a Mortgage When I Have Bad Credit?

Article by Jenna Finch in

There is always someone willing to lend anyone money. But you don’t want to go to a loan shark to obtain a mortgage. It does not seem rationale that anyone would lend a person with bad credit money. After all, does not a bad credit score mean that I am at risk of defaulting?

Bad credit is not the only criteria used during the loan assessment process. If it were, mortgage applications could be approved or denied in a manner of minutes. Since they often take over 30 days, it is clear that the lender is looking closely at the application.

Lenders are in the business of lending. They are not in the business of rejecting applications. Traditional lenders are less apt to accept an application with bad credit but that is because they are limiting the number of new loans they are accepting. This means they are more critical about each loan. But other lenders are writing more loans and you can find lenders who will work with you on your bad credit mortgage application.

Will They Simply Ignore My Credit Score?

Credit scores are never completely ignored. But they are not really the sole reason that a mortgage application is denied. Credit scores indicate your history of credit use. It does not say anything about your current financial situation. This means that a poor credit score is not really as much of a risk as credit scoring agencies would have you believe.

Credit scores will affect the interest rate you will be charged. With mortgage interest rates sitting at historic lows, there is no reason to avoid seeking a mortgage simply because of a bad credit score. Lenders who are lending to people with bad credit know that the goal is to write a mortgage loan that will be repaid. This makes it good business to not charge an exorbitant interest rate simple because the credit rating of the applicant is poor.

Lenders Want Affordability

Affordability is ultimately based upon the money coming in and the money going out. If there is enough income and the right amount of debt payments, then a mortgage will be approved. This is tied into the debt-to-income ratio.

Today the general debt-to-ratio calculation states that forty percent of excess income must be available to make mortgage payments. If you have an extra $1000 in income left after your monthly expenses, you can only get a mortgage with payments of $400 or less. This calculation has nothing to do with credit scores at all.

How Do I Find a Lender?

When we think of mortgages we generally think about the traditional mortgage lenders. But these are the lenders that are limiting the number of new mortgages that are being written. You can, however, explore your area for subprime lenders.

Subprime lenders do require higher interest rates than do the traditional lenders. But they are also more likely to approve mortgage applications for people with less than perfect credit. Their expertise is in the area of lending to the people with bad credit.

The upside to applying with a subprime lender is that they will generally offer longer terms for the mortgage. A longer repayment period will lower the monthly repayment amount. This means that even with the higher interest rate, you can get an affordable mortgage.

If your bank cannot help you attain your financial goals, contact us today
to see how we can turn your application into an approval!


Once you are interested in obtaining a mortgage, then you most likely will also be interested in the help of an experienced real estate agent:

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