How to get a Mortgage with Bad Credit in Ontario?
You’re more than a credit score, unlike traditional banks we use alternative lending practices to help you reach your homeownership goals.
What is a Bad Credit Mortgage in Ontario?
Bad Credit Mortgages are often referred as No Credit Mortgage or Poor Credit Mortgages as well, below are some of the reasons for you to be classified into a bad credit mortgage.
- Credit Score below 600.
- Numerous miss payments and poor repayment history.
- Currently in a Consumer Proposal.
- Bankruptcy less than 3 years ago.
- No Credit history or trade lines eg: No credit cards, line of credits or any type of credit facilities from other lenders.
- Alternatively, people who earn income as cash or don’t declare to CRA use Bad Credit Mortgage Lenders.
Can you still get a Mortgage with Bad Credit in Ontario?
YES, YOU CAN! Fortunately, we have plenty of alternative lenders who focuses on providing mortgages for the people who don’t fall under the traditional banking guidelines. Below is a quick summary of an alternative lenders mortgage product.
- 80% Loan to Value for most of Ontario, upto 90% in GTA and other urban cities. (What is Loan to Value?)
- No Credit Score required.
- Previous bankruptcy / existing consumer proposal considered.
- All Sources of Income considered.
- For Self-Employed, Bank Statements can be used to prove income if full income is not declared.
Who are Alternative Lenders or B Lenders?
Alternative lenders are usually Trust Companies, Banks, Mortgage Corporation who solely funds and services Bad Credit Mortgages. We work with more than 30 alternate lenders, below is our top 2 picks, you can view all our lenders here
MCAP has over $66 billion mortgages under the administration, MCAP Eclipse is their alternate lending division.
Eclipse lends almost all of Ontario, also allows various alternate income sources such as (tips, roommate contribution etc)
B2B Bank is a wholly-owned subsidiary of Laurentian Bank of Canada (founded in 1996).
They lend to all of Ontario, offers an army of products and often waives the fees.
Cost of using B lenders?
It is important to understand how B Lenders work, they offer you a mortgage solution when traditional bank says no. They have more flexible guidelines as well.
B Lenders do charge fees and the reason they charge fees is to make up for the cost of borrowing funds. Traditional banks which uses their client’s deposits, gics, savings to lend as mortgages. They often pay no or little interest on this funds. B Lenders borrow funds from Private Investors, institutions hence their cost of borrowing is higher.