Have you given up on buying a home because of bruised credit? Poor credit may happen for a plethora of reasons. Perhaps you lost a job, forgot or are unable to pay your bills, or just moved to a new country. Regardless of the reason, there is no need to feel discouraged. It may require more terms and paperwork, but you are still able to qualify for a mortgage that works for you and your future.

The credit score you need to acquire a mortgage depends on the lender. For the best options and most competitive mortgage rates you should aim to have a credit score of at least 680, but if that is not achievable for you personally, a mortgage is still possible. It just may come with additional fees and at a high interest rate. Unfortunately, your lender does not know you on a personal level and it is hard for them to trust you with a low credit score. Banks typically look for people who they believe are going to be able to pay enough and on time.

Before you investigate obtaining a mortgage, stop and think about why your credit score is bad. If your credit score is low because of past mistakes that you have learned from then go right ahead, but if it is because of reoccurring poor financial choices then perhaps it is best to focus on raising your credit score first. Failure to keep up with your mortgage, especially with an already low credit score, can put you in a very risky position.

Having a higher credit score will get you the best mortgage options available, but there are still many alternatives for those with lower scores. Working with private lenders may be a better option if your credit score is bruised. Avoiding working with major mortgage lenders will increase your chances, because private lenders often work with poor credit borrowers and typically have no minimum credit score requirements to qualify for a loan. Private lenders still need to balance their risk and you may have to settle for a much higher interest rate in order to receive a mortgage. They may also charge additional fees that major lenders will not.

And that’s where we as mortgage brokers come in. We specialize in negotiating the best possible mortgage rates for our clients. We have access to many private lenders and banks, and have experience working with them, so we will navigate all the options for low credit scores much more efficiently than solely you.

Overall, if obtaining a mortgage with a low credit score is too much of a headache, consider working towards raising your credit score. The biggest factor in achieving this is time. Nothing you do will change your credit score overnight, but practicing consistent, good credit habits, and closely monitoring your  credit report will begin to increase your score, and from there you can begin to investigate better mortgage options. More helpful tips can be found at https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/improve-credit-score.html