Truthfully, you have lots of options for getting a mortgage with bad credit. While you’re most likely going to pay higher interest rates, bad credit doesn’t always automatically mean you’re doomed when it comes to buying a home; and once you start looking, you’ll find there are options you never even thought of, or knew of. But among those many there are a few that often outshine the others, and prove to be the best way to get a mortgage with bad credit. Here are the three best ways to get a mortgage with bad credit.
#1: Starting with a larger down payment
This is the best way to get a mortgage with bad credit. Generally you need 20% of a home’s purchase price as a down payment before lenders will even consider you. Some will allow you to still obtain a mortgage with less, but you will need to buy mortgage insurance, which can come at a cost of thousands of dollars a year. But pay over 20%, and as much over as you can, and lenders are going to look more kindly on you. By paying more now, lenders have to loan you less; and that’s always good for them.
#2: Get a private mortgage
You can find corporations and individuals that might be willing to offer you a private mortgage. Essentially, they act as the lender and loan you the money to buy the home. They in turn, make mortgage payments to you every month. Just because a private mortgage is much different than a conventional mortgage, in that you have a lot more room to wiggle and maneuver, you still need an actual mortgage contract and all proper paperwork set in place.
#3: Work with a Toronto mortgage broker
A Toronto mortgage broker can point you in the direction of lenders that are willing to offer mortgages to people with bad credit. They can also tell you how much of a down payment those lenders will need before they will offer you a mortgage. And they can also guide you towards their entire network of private lenders, that don’t advertise their services nearly as much as traditional lenders do.
