Is Now The Time to Consider Applying for a Bad Credit Mortgage?

You’ve come across a property that would be the perfect place to live. The price is right, the location is great, and it’s easy to see yourself living there for quite a few years. Unfortunately, you don’t have the best credit score right now.

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Instead of allowing that to stand in the way, know that you don’t need perfect credit in order to start looking for mortgage in Toronto that you can afford. There are lenders who work with people who have past credit issues but otherwise meet their requirements. Here are four signs that one of those bad credit lenders may be willing to approve your application.

The Crisis is Past

The reasons why your credit score is low all happened a number of years ago. Since getting through that crisis, you’ve kept up to date on all your obligations and currently owe very little. Eventually, your score will improve. Until then, more traditional lenders are less likely to work with you.

Lenders who offer bad credit mortgages are less concerned with what happened back then. They are more interested in how much income you receive each month and how well you’re managing any current debt. If they like what they see, you stand a good chance of being approved.

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You Have Money For a Sizable Down Payment

Over time, you’ve been able to save money that can be used for a down payment. As it happens, the amount that’s on hand is a significant percentage of the asking price for the property you want to buy. That’s a factor many lenders will find attractive.

Since you can put down a sizable down payment, there’s less of a balance to finance. Bad credit lenders will look at that and see the down payment as one factor that reduces the risk of doing business with you. When the loan balance is much less than the market value of the property, they’re protected even if you were to default on the mortgage. This is one quality that’s sure to get a lot of positive attention.

You Have a Specific Plan for Managing the Mortgage Responsibly

One of the things you learned during those financial difficulties in the past was how to budget carefully and stick with the plan. Now that you’ve found a home that you want to buy, it wasn’t long until there was a reworked budget that had plenty of room for a mortgage payment, homeowners insurance, and all the other expenses that go along with residential property ownership. You have no doubt that you can stick with the plan and eventually pay off the mortgage on time. Lenders are sure to take notice of that.

You Understand That the Interest Rate Will Be Slightly Higher

You do understand that a lower credit rating means agreeing to financing that comes with a higher interest rate. What you may not realize is that there is competition between bad credit lenders. The rate you end up paying may be above prime, but it may not be as much as you anticipated. The only way to know for sure is see what different lenders offer and then make a decision.

Don’t let the chance of a lifetime pass you by because the local bank loan officer won’t talk with you. Evaluate your circumstances and be sure you can take on a mortgage. If so, know there are lenders out there who will talk with you about a quick close mortgage that allows you to act now instead of having to wait for another property to come along.

when is the right time to apply for a bad credit mortgage

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