How to get bad credit mortgages?
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If you have a poor credit rating it might become a major problem to getting a mortgage, but do not worry, some lenders are ready to help you even if you might be refused everywhere else.


Your current situation
You might see it as an unfair situation, but sometimes your good salary and big deposit do not guarantee you a mortgage. If you decided to get any type of bad credit mortgages almost in all the places around Canada you are likely to be refused.
All the banks are very cautious about lending their money. So before giving any mortgages they always check your story to find out if you have any bad credits. If yes, then there is 90% probability that you will get a refuse. Moreover, they will try to find out if you have ever filed for bankruptcy.


What mortgages can you really get?
Of course, there are some bad credit mortgages, which were invented for the people whose credit history is not perfect. Such loans are usually called ‘sub-prime’ or ‘adverse credit’ mortgages. They are generally proposed not by regular credit companies but by lenders who specialize in this area.
The working scheme at such places is the same, but it is very likely that you will have much higher interest rates and get a more considerable deposit to put down. Usually lenders require a deposit of 25% - 30% of the property value; generally you would have got 5% - 10% while applying for a standard mortgage.


Credit history
Even before thinking of applying for any loans, always check your credit history very carefully. Such actions will establish if there are any reasons for the application refusal. You should always remember that even very simple oversights, can have bad impact on your credit rating and lead to the bad credit history.


What do lenders know
In case of applying for bad credit mortgages the lenders will check not just the credit report but also ask you about some other bits of information before offering you any mortgage.
They might be interested in your pay slips from the employer or, if you are self-employed, in the three years’ accounts and bank statements to figure out whether you can manage to pay more bills.
To avoid any uncomfortable situations, always try to pay your bills on time, because late payments will have a bad impact on the credit history.


Always compare
If you decided to apply for any loan and not just for a bad credit mortgage compare all the deals you can find to be sure that you have found the best one to suit your needs. In case you are not very sure what variant to choose, find an independent mortgage broker to help you.
Do not forget to arrange any fees or charges, as they can influence the total cost of the mortgage.

Barbara Collins, a broker, who consults people in tough situations and explains what to do when you have bad credit history. The article is based on data from Canada Wide Financial Company which provides bad credit mortgages.

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