Slow credit or poor credit? There’s a mortgage solution.

 Life doesn’t always go according to plan.   You’ve heard that saying before.  When you have financial trouble, it can affect your credit score.    Today, that makes qualifying for a loan or mortgage very difficult….. but not impossible.

With all the new mortgage rule changes over the past 5 years, its made borrowing at reasonable rates almost impossible.   Many of us have been forced to borrowing on our high interest credit cards or finance loan companies.   These credit facilities carry huge interest rates and short amortization periods resulting in very high monthly payments.   (by the way, isn’t it ironic that the Federal Govt has tightened mortgage rules every year for the past 5 yrs but they haven’t touched the higher interest credit card companies and finance companies!   Who owns the credit card companies and finance companies?  That’s right.. the BANKS!  Who’s interest are they looking out for?)

EXAMPLE OF CREDIT CARD and FINANCE COMPANY LOAN PAYMENTS:

• $20,000 credit card will carry a payment of around $600/mth  (17.5% interest)
• $20,000 finance company loan will carry for $640/mth (24% interest)
• how about a car loan with a 25% interest rate!! (oh, did I mention this is a TD BANK CAR LOAN?)

Today, there are better solutions.  We have seen a number of 1st and 2nd mortgage Lenders step up and offer products with competitive rates and manageable payments.   Where a bank cannot offer you a mortgage based on your credit score, a secondary Lender can jump in and offer you a temporary solution until you get your credit back on track.

EXAMPLE OF SECONDARY MORTGAGE PAYMENTS:

• $300,000 1st mortgage for someone with slow or poor credit will carry for between $1561/mth to $2101/mth.. depending on the borrowers financial situation.
• $20,000 2nd mortgage for slow or poor credit will carry for between $180/mth to $250/mth.  depending on the borrowers financial situation.

Secondary Lenders charge higher rates and some fees, but they carry a lower monthly payment.    These products should only be for a short term.  And most borrowers will only need them temporarily.   Once they get their circumstances in order, most of these consumers will get back into fully discounted ‘A’ rate products.

It takes a plan of action and a commitment by the borrower to make this work.  If you can keep up a good repayment history for 2 years, you will rebuild your credit.  Over the years, I have helped a great number of consumers get their financial profile back in good standing.  The next time you hear about someone with poor credit, or if you are experiencing financial problems, speak with an experienced Mortgage Broker.  A Broker has access to a lot of Lenders that can help even the worst situations.

Your best interest is my only interest.   I reply to all questions and I welcome your comments.  Like this article?  Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca