What Are My Mortgage Choices If I Have Bad Credit? - Baltimore Post-ExaminerBaltimore Post-Examiner

What Are My Mortgage Choices If I Have Bad Credit?

You’ve found a home that’s in your price range, but there’s one small snag: your credit is in the toilet. Something has to be done if you want to put in an offer on the house before someone else snaps it up. Take heart in the fact that there is a commercial mortgage broker in Toronto who will work with you under the right circumstances. Here are some other options to consider.

Paying Off Debt and Cleaning Up Your Credit Reports

Maybe your credit score is not quite as bad as you think. Even so, it would help a lot if you could do something about the amount of debt that you’re carrying currently. The combination of less debt and more paid in full accounts makes you more attractive to lenders. That’s because it’s easier to see how you could manage a mortgage payment.

While you’re working on that, order copies of your credit reports. Go over each one carefully. If there are any errors, see what can be done to correct them. That may also increase your score by several points and make it easier to qualify with a greater range of lenders.

Saving More Money for a Down Payment

If you can pay for more of the home on the front end, that translates into needing to finance less of the purchase. Some lenders will look at the amount you need to borrow versus the market value of the property. If the amount you need is significantly less, more lenders may be willing to take a chance on you. The reason is that even if you default on the mortgage, the lender is highly likely to recoup the remaining balance once the house is sold.

Getting a Co-Signer

Have you considered the idea of getting a co-signer? This would be a relative or friend who has great credit and who is willing to vouch for you. Keep in mind that this does mean if you cannot make the mortgage payments for any reason, the lender will expect the co-signer to do so. You may also want to consider the fact that this type of financial arrangement could put some stress on your relationship with the co-signer.

Working With an Alternative Lender

If involving a friend or relative is not something you want to consider, there are alternative lenders who might help. That includes partnerships that have come together for the purpose of providing loans to those who are turned down by banks. In fact, you may find a broker who can help you find a mortgage for bad credit by routing the application to this type of lender.

Don’t assume that the goal of becoming a homeowner is out of reach. Consider these options and see what seems to work best for you. If you do choose to seek out an alternative lender, make sure that there is no doubt about what sort of obligation you’re taking on. In the best-case scenario, you can get the home you want, make the payments on time, and increase your credit score all at the same time.

About the author

Rob Teitelman

Rob Teitelman is an avid blogger and digital marketing enthusiast with years of experience creating content for businesses and brands. His work has been published on major publications and blogs across North America, covering a variety of niches from tech to real estate. Recreational guitarist, amateur photographer and avid fan of all things technology and gadgets. Contact the author.

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