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Can you get a mortgage with bad credit? There are certainly options for those in need of a bad credit mortgage in Ottawa.
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 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:
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
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 for a private mortgage. These lenders can assist with a bad credit mortgage. Private lenders can be a 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
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.
Andrew Thake is a seasoned mortgage broker with over 15 years of industry experience. He’s assisted more than 2,200 clients in finding their ideal mortgage solutions. Recognized for his excellence, Andrew has received high honours and awards, including the National Rookie of the Year from TD Canada Trust and recognition as a Top 10 Ottawa Mortgage Broker in 2023. He has also been inducted into the Hall of Fame at Dominion Lending Centres and has consistently received their Platinum Award during his tenure as a mortgage broker.
Andrew’s dedication lies in serving his clients and prioritizing their needs with an empathetic approach. Throughout the application process, he provides tailored, informed, and efficient services to ensure the best mortgage solutions for his client’s unique circumstances. The best part of Andrew’s job is when he gets to see the joy on his clients’ faces following their mortgage approval.
