Can I get a mortgage with bad credit?

There may come a time when you have bad credit. This may be due to financial challenges that are out of your immediate control such as by co signing for someone that doesn’t make their payments on time. Or perhaps there have been some credit challenges from a break up when you had shared credit.

Fortunately, having bad credit does not limit you from owning a home. There are options to get a bad credit mortgage in Ottawa.

Is My Credit Good or Bad?

Depending on if you are purchasing or refinancing, the minimum credit score can be different. For refinancing, many lenders would like the main applications credit score to be at least at 680, however it can be less for a purchase.

Here is a summary of the credit scores and the ranking from very poor to exceptional:

  • 800 or higher: Exceptional
  • 740-799: Very good
  • 670-739: Good
  • 580-669: Fair
  • 579 or lower: Very poor

Those with a credit score of fair or below would be considered by a traditional lender as someone with bad credit. You may need to seek a bad credit mortgage option.

Anything below 580 would automatically mean you will need to add a co signer or seek a private mortgage in Ottawa with a private lender in Ottawa.

Learn more: How to Build Your Credit Score

Bad Credit Mortgage Ottawa Options

With bad credit there are options. An option to still have access to lower rates and traditional lenders would be by adding a qualified cosigner. When a cosigner is added the lender will also focus on their financial picture to help offset any challenges that you may have in your finances.

Another option is to look at a private mortgage.  These lenders can assist with a bad credit mortgage.  Private lenders can be great stepping stone solution to help you into a home while you are working on building your credit. Even though their rates are higher, there is value in paying down the mortgage, having the house appreciate in value, building your credit score with good payments and so on. The best thing to do is to look at the mortgage payment with a private lender and ask if you think you would be comfortable with that payment for a few years. If the answer is yes, then this may be an option for you.

The last option is waiting. You can focus on building your credit over the next few years while renting or living with friends or family and then apply once your score goes up. A mortgage broker can review the pros and cons of buying now or waiting to buy to see what is the best fit for you.

Learn more: Private Mortgage Ottawa

What is Bad Credit?

Bad credit is when you have a low credit score. This is generally when there are missed payments on your debt obligations. The debts can be car loans, credit cards, phone bills and more. Bad credit can affect your ability to get approved for a mortgage. Also, bad credit can include debts that are in collections. Your credit is tracked on a credit bureau. Some credit bureau companies are Equifax and Transunion. You have a separate credit report and credit score with each company.

About Ottawa

Ottawa is Canada’s capital. It is located in Ontario. The city runs along the Ottawa River. Ottawa has the famous Rideau Canal which is popular for staking on in the winter. The population of metropolitan Ottawa is approximately 1.4 million. Ottawa was originally called Bytown. You can get to Ottawa by plane, train or automobile. There is an international airport. 

Learn more: City of Ottawa

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