Bad Credit Mortgages

Ultimate Guide: Questions when meeting a Bad Credit Lender

If you are seeking help fixing your bad credit score and poor credit history or aiming for low-interest rates and approval for a loan application, you may want to be prepared and equipped with inquiries when readily expressing your issue.

Here is the ultimate guide for frequently asked questions (randomly ordered) when meeting a Bad Credit Lender:

What are the usual documents you need?

In contrast with financial institutions and prime lending companies, bad credit lenders do only need a few documents from you to start your application process. For a mortgage loan, these include:

  • 2 recent years of T1 or T4 (all pages) showing your name and employer.
  • Recent dated Letter of Employment (if employed)
  • 2 most recent consecutive paystub (if employed)
  • 2 Government-issued ID’s (health card not accepted)
  • Latest Property Tax Bill (if any)
  • Latest Mortgage Statement (if any)
  • Condo Fee (if any)
  • 3 to 12 months bank statement for downpayment purposes
  • List of assets like vehicles, savings, life insurance, RRSP, mutual funds, stocks, and/or bonds. (information is required but no documents needed)
  • 2 recent years of Notice of Assessment
  • Business Documents (if self-employed)

You can also send an email to your credit repair specialist and receive pre-approval mortgage parameters.

What types of loans are qualified for me?

There are many suitable loans with favorable repayment terms depending on your credit profile. For instance, you could be eligible for open /closed mortgage rates or debt consolidation loans.

  • Open mortgage – usually has higher interest rates. On the other hand, this mortgage grants you the power to complete your loan at any given moment without fees This opens for flexible monthly payments and little to no downpayment.
  • Closed mortgage – as opposed to open mortgage, a closed mortgage allows you to have lower interest rates but fines you when you fully paid it off before the end of its term. You will also be fined when refinancing or re-negotiating your home equity as collateral.
  • This type of loan allows us to unify multiple high-interest debts and lines of credit into one sizable piece of loan. This type of loan is suitable for borrowers that are drowning on high-interest rates and payday loans from credit cards.

How much money would they loan to me?

Consumer loan varies depending on your report from credit reporting agencies. It is important to monitor and check your credit score as well as your bank accounts. Frequently it ranges from CAD 1,000 to  CAD 50,000. Rebuilding your credit is one way to access higher loan amounts.

What if I’m unemployed?

Prime lenders see unemployed clients as a risk factor, therefore, unemployed borrowers are having a hard time convincing them. However, to be doable you must have a higher credit score and proof of stable earnings to take care of. These could consist of:

  • Social Security Benefits
  • Child Support
  • Investments
  • Disability Income and more

How much time does this take?

This could take you from several days to a couple of weeks depending on the lender. Online lenders are usually faster based on application to the disbursement process. In preparation, you may be needing your credit report from credit bureaus to speed up the approach.

How much interest rates would I be offered?

Discuss and discover what type of rates will likely be provided for the reason that it all depends on your credit report and score. Your advisor most probably has an access to several lenders that may approve your preference and will give you the most reasonable rate.

How much down payment?

Normally, the value of your down payment will vary prior to the kind of loan you most comfortably choose. It may differ from as low as 5% to no down payment whether its long or short-term and secured or unsecured loan.

How much earnings do I need?

Prime lenders and banks determine the value of the house or amount of loan that you can borrow based on your income. This is one of their main factors that determine whichever you are approved or not.

How much closing costs do I need to pay?

This closing cost is a supplementary payment when transferring the property to the buyer. These fees are expected to be paid upfront and either shouldered by the buyer or seller depending on what has discussed.

Do I need collateral?

As credit specialists have access to a network of bad credit lenders, it is up to them for their own specific requirements. Most unsecured loans do not have collateral while secured loans will be needing a form of collateral.

Is there any risk?

For instance, lenders could seize your collateral when you usually got a secured loan. Especially when much of it comes from predatory lenders. You may also risk getting more debt when bills are not paid on time.

Being aware of scammers and payday lenders is a critical role when looking at too good to be true offers. Specifically, if you are one of the people having problems and issues qualifying for a loan.

How to fix bad credit?

The good thing about credit is that they are repairable. People tend to question themselves how do I fix my credit“, here are some ways:

  • Pay your bills on time
  • Submit a dispute letter
  • Avoid getting credit cards at the same time
  • Boost your score with the help of a credit specialist
  • Improve your debt-to-income ratio by paying down debts
  • Leave the account open for unused credit cards

Final Thoughts?

That being said, having bad credit checks can be a significant obstacle in the way of achieving your goals. Being prepared to ask questions beforehand and collect as much information about what you are getting into is probably the best way to quicken the process.

Finding a trustworthy bad credit lender and a credit specialist is your first step when understanding your finances and help you getting a mortgage loan with poor credit.

The long-term benefits that come can outweigh past poor credit reports and boost your overall credit score to increase your creditworthiness when presented to potential lenders.

Get ahead of your financial future with creditrepairnow.ca and achieve closer steps to financial freedom.