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January 23, 2021

Myths About Bad Credit Mortgages That You Need to Jettison

You’d like to become a homeowner, but your credit is not in great shape. Someone suggests that you look into what a bad credit mortgage lender could do for you. There’s some hesitation on your part because of things you’ve heard in the past. Much of what you think you know about this financing option isn’t true. With help from a reputable service like Mortgage Canada Wide Financial, it’s possible to find financing that you can afford. Along the way, you’ll end up finding these myths have no basis.

Bad Credit Mortgages Are All the Same

One of the more common myths that you’ve heard is all bad credit mortgages are alike. They don’t vary in terms of the interest rates, the costs associated with the financing, or the duration of the mortgage terms. Mortgages of this type can vary significantly.

You’ll find that some lenders do charge higher rates of interest than others. Some of the offers that come your way will have fees that must be settled upfront. Others may lack those fees. Even things like the amount of a down payment you need to bring to the table will differ from one lender to the next. If one deal isn’t all that appealing, don’t give up. The next one could be just what you need.

Lenders Don’t Report to the Major Credit Bureaus

Indeed, some bad credit lenders don’t report to the major credit agencies. The good news is that the better ones always report to at least one bureau. What you want to do is confirm that the lender you’re talking to does in face report to one or more agencies.

Why does this matter? You want to use the mortgage as a way to repair your damaged credit score. If the lender does report regularly to those agencies, the positive comments will help reduce the impact of those older negative comments. By the time the mortgage has been in place for a couple of years, your score could be significantly better.

You Can’t Refinance a Bad Credit Mortgages

Some insist that once you secure a bad credit mortgage, you’re stuck with it from now on. It is possible to refinance this type of mortgage over time.

As your credit score improves, it may be to your advantage to see what refinancing would do for you. As lenders look at the improvement in your score and your payment history with the current mortgage holder, they may decide you’re a good risk. At that juncture, you can often refinance the remaining balance on the mortgage and lock in more attractive terms.

There’s Always All Sorts of Outrageous Fees

It’s not just upfront fees that you have to be worried about according to some sources. There are also recurring fees that apply over the life of the mortgage. While this is true with some lenders, it’s not true with others.

Your mission is to find a lender who includes few if any recurring fees like charges for posting or processing payments, keeping the online account access up and running and similar types of charges. There are plenty of bad credit lenders out there who operate without these types of fees.

Are you ready to look for the right financing deal? You can click here for the latest bad credit mortgage rates as well as compare the terms provided by several lenders. There’s a good chance that the right deal is waiting for you right this minute.

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