Being a homeowner with bruised or bad credit can seem like a catch-22 — you might have equity available in your home that could help you erase your bad debts but accessing that equity through bad credit mortgage financing can seem nearly impossible.
All is not lost, though. There are lenders who offer bad credit mortgage financing of second mortgages, mortgage refinancing, home equity loans, and more — but you have to know what to watch out for.
The most frequent lenders who offer mortgages for people with bad credit are often private lenders.
However, there are several challenges with most private second mortgage lenders, including:
- Often, mortgages are administered by brokers or lawyers, so you have no real direct contact with your lender.
- Many private lenders are lending you their own money, which can create an emotional attachment for them.
- Most private lenders don’t report to your credit reporting agency, like Equifax. This is crucial, especially if you’re considering mortgage financing to repair your credit.
When you’re looking for a lender, private or otherwise, make sure you are asking the right questions.
Ask:
- Who you will be working with throughout the loan cycle.
- Where the loan money is coming from.
- Whether the lender reports to a credit agency.
- If the mortgage loan is open or closed. An open mortgage means you can prepay any amount at any time without a compensation or prepayment charge.
There is another option, besides a private lender. Some finance companies offer the same financing private lenders do.
For example, at Prudent we offer mortgage financing to people who are self-employed, people who have a bad credit history, and financing based on available equity.
There can be many advantages of going with a finance company like this over a private lender. For instance, at Prudent:
- Our rates are lower than most private lenders.
- You are dealing directly with your lender.
- We also offer more value and can even connect you with other products and services that will help your financial situation.
Whether you’re looking for a first, second, or third mortgage, or a home equity personal loan, Prudent Mortgage Corp. can help.
Get in contact with us today. Call 1-888-852-7647or visit www.prudentmortgage.ca.