Mortgage brokers in BC have a solution for you if you have credit problems. Mortgage brokers have access to over 40 traditional and non-traditional lenders who offer all types of mortgages for the credit challenged individuals

There are a variety of reasons why individuals and families have credit problems.  They include the following:

• Losing your job

• Business failure

• Late payments

• Over extended on credit cards

• Tax liabilities

• Divorce

• Medical bills

• No credit

• Bankruptcy

• Leaky condo

Whatever the reason, you will need help in obtaining a mortgage since traditional lenders focus on clients with good to excellent credit.   While there are people in this business who will only to prime clients, BC Mortgage is not one of them.  Our business philosophy is to help everyone possible.  We guaranty you that nobody will work harder to see to it that you purchase a home despite your credit challenges.

There is always a way around bad credit.  Sometimes the solution can be immediate.  Other times, you need to work with BC mortgage brokers  to clear up issues on your credit bureau.  By clearing up issues on your credit bureau, you can raise your credit score, thereby allowing you to obtain financing at the best discounted interest rates.  

Some of the factors the lenders consider is the length of time since the problem occurred, the equity you have in the property, net worth, job stability and the reason for the credit problem.

If you are looking for a high-ratio mortgage (i.e, CMHC or Genworth insured mortgage where the borrower has less than 20% equity on a property) and you went through a bankruptcy, you will need to have been discharged at least 2 years ago and have re-established your credit for at least 1 year.  I've heard that there have been exceptions to this but this is very rare.  If you have been on the job a long time and have a larger down payment, you can still be eligible for a CMHC high-ratio mortgage.  You would also have a very good reason for declaring bankruptcy.  

A larger down payment from your own resources (as opposed to a "gifted" down payment) can go a long way in improving your chances of obtaining a mortgage.  A large down payment shows your ability to put money aside for a mortgage.   

If you have more than 20% down payment, there are more options since lenders/banks do not have to follow CMHC or GE Mortgage Insurance policies.  The traditional banks will not be interested until after 2 years (or even 3 years) after bankruptcy.  However, there are other sources that are willing to consider this type of financing.  Be prepared to pay a higher interest rate and go through more hoops to get this financing.  

It's also a good idea to get a copy of your credit bureau.  Your credit bureau can be obtained from Equifax or Transunion, two of Canada's credit rating agencies.  Often, after a bankruptcy, some of the previously settled collection items may not have been cleared from your credit bureau.  Having those items removed from your bureau will bring up your credit score. 

Spend time talking to mortgage brokers (BC) that you feel comfortable with.  It may take several months for you to make your purchase.  You need to find someone who will promptly and respectfully respond to all your inquiries.

Credit Scores

Your credit score (sometimes referred to as the FICO score) is the single most important factor that lenders use to determine how you manage your credit. Scores range from 300 - 900.  What determines your credit score?
 
1) Previous credit (whether debts were repaid on time) - 35%
2) Level of indebtedness - 30%
3) Amount of time credit has been used - 15%
4) Pursuit of new credit - 10%
5) Types of credit - 10%

 

The minimum credit score required by CMHC or Genworth insured mortgages is 600. However, this is still not a very god score and many lenders will have a higher minimum. 

If you are planning to apply for a mortgage it is a good idea to obtain a copy of your credit bureau.  A vast number of credit reports contain errors and correcting them can take between 6 - 12 weeks.  Discuss your credit bureau with your mortgage professional so that you can be guided as to how to improve your credit score.

You are entitled to obtain a free copy of credit bureau at Equifax or Transunion.  The free copy, however, will not contain your credit score.  If you're credit score is low and you will be taking out a large loan within the next 6 months, we highly recommend that you download and read this document: Understanding your Credit Score .  This is the most comprehensive document that I've found that explains how credit scores are arrived at.  Improving your credit scores could save your thousands or event tens of thousands on mortgage interest.  

Be sure to watch our video on how to manage and improve your credit scores.  Please go to our video page by clicking the image or here.

What if you do not have a credit score?

No credit score is better than having bad credit.  Some traditional lenders will look at borrowers without a credit score if you are applying together with someone with a good credit score. 

There are also some non-traditional lenders that can help.  They will still want to determine your payment habits.  This could be done by showing a bank reference letter, rent letter (confirming that you have been diligent in paying your rent on time), utilities bill, etc.  The lender may also want to see a history of accumulation of savings for the down payment.  

Mortgage brokers are experts in assisting individuals with no credit score.  Do not hesitate in contact a mortgage broker in your area for a free consultation.

Bankruptcy and Foreclosure

If you are facing foreclosure, there are solutions for you.  Click here to learn more.

If you want to learn more about private mortgages click here: Private Mortgages - Is it right for you?

Resources:

• Equifax's website  - credit bureau
• Transunion's website - credit bureau
• Credit Counselors of BC - BC's non-profit credit counseling service
• Canadian Bar Association - Information on foreclosure
• Boale, Wood & Company - Involvency trustee - bankruptcy, consumer proposals, foreclosure
• Office of the Superintendent of Bankruptcy, Government of Canada
• Mortgage Primer for the Credit Challenged
• Private mortgages - Is it right for you?

• Understanding your Credit Score

• Bankruptcy and Foreclosures

"My job is done when you know your options"