Do you have bruised or bad credit and are in need of a new mortgage, or looking to refinance your existing mortgage? We can help.
These days when you apply for a mortgage with your bank and don’t meet their criteria, what do you do next? Who can you turn to?
Auxilium Mortgage of course! Thankfully, we have access to lenders who specialize in non-conventional mortgage loans to help out people just like you. People who:
- Have less than perfect or bad credit
- Have no established credit
- Have had a previous bankruptcy
- Need a non-traditional mortgage
- Are currently in a consumer proposal
- Are in credit counselling today
- Are new to Canada and are non-landed immigrants
- Are self-employed and can’t verify their income by traditional means
- Are offshore investors, investing in Canadian real estate
- Are buying a unique property that doesn’t fit into the guidelines of the major banks and insurers, like CMHC.
If you fall into any of the above categories, we have the following options available:
1. First Mortgage Program
- Up to 80 percent of the value of your property in the form of a first mortgage, either with a bank or finance company. For example, let’s say your home is worth $500,000 under this program; you could borrow up to 80% or $400,000 on a 1st mortgage.
This program is for clients with traditional employment, as well as those that are self-employed, both with verifiable & non-verifiable income. Credit wise, clients may have anything from a few late payments to a discharged bankruptcy on their credit bureau. This program generally offers shorter term solutions that are priced fairly competitively in the marketplace.
2. Second Mortgage Program
- Up to 90 percent of the value of your property in the form of a second mortgage with a secondary lender, either institutional or private. Again, if your home is worth $500,000, you could potentially borrow up to $450,000 combined between an existing 1st mortgage and a new 2nd mortgage. So let’s suppose the 1st mortgage is $350,000; that means you could potentially have a 2nd mortgage for $100,000, which would take you to 90% combined between the two.
This is an excellent solution when it doesn’t make sense to pay out the existing first mortgage when it has a great rate, or the penalty to do so is cost prohibitive. Credit can be reasonably tarnished, even up to a previous bankruptcy. Folks with unverifiable income, the self-employed and recent immigrants to Canada are just a few examples of those that fit this program. In some cases, mortgage financing up to 90 percent of the home’s value can be arranged.
3. Equity 1-2-3 to 65%
- This is our simplest program: a first or second mortgage up to 65 percent of the value of your property. So once again, if your property is worth $500,000, you can borrow up to $325,000 either on a brand new 1st mortgage or any amount on a 2nd mortgage, so long as the combined value doesn’t exceed 65%.
This solution can be for folks who may have reasonable credit or exceptionally tarnished credit, and/or those who may have gone through a previous bankruptcy. Income is either unverifiable or not sufficient for a traditional lender.
Here’s how it works:
Step 1 – We take an application; we approve you the same day (regardless of credit or income)
Step 2 – We get an appraisal to confirm overall lending value of your property
Step 3 – You get up to 65% of the appraised value
That’s it, “no jumping through hoops or having to walk on water” under this program. Your home is the key, and no one “puts you through the wringer”.
Here is a brief video that explains some of the concepts that are explained below:
Non-conforming mortgages are qualified based on the following:
When your deal doesn’t fit all the boxes, then down payment/equity is everything. Should your mortgage loan go sideways, the down payment/equity is all that’s left to provide a cushion for the lender. That’s why our mortgage lenders will generally want to see a minimum of 10 percent of the value of the home, in the form of down payment/equity. Naturally, the higher the down payment, the easier the qualification, like our “Equity 1-2-3”.
Downpayment of as little as 5% to 10% and exceptionally bruised credit will result in the lender considering other aspects of the deal, such as your job stability & income.
Traditional lenders rely heavily upon formulas to qualify you. Our lenders are flexible and will consider all forms of income; self-employment (fully declared or not), commission, pension, disability, investments etc.
The property is the key; what our lenders are looking for are properties that are both marketable and in reasonable condition. Under our equity lending programs, we can lend more on a property in a major urban center than one in a remote rural location. As the location becomes more remote, the overall lending value is reduced. For clients wishing to obtain higher lending values for remote or rural locations, there will be a greater reliance on their income & credit.
When it comes to credit, good, bad or ugly we don’t discriminate. We know from experience that no two clients have the same credit; that’s why we have multiple lenders with different lending requirements. These different lending practices allow us to offer a myriad of options to you, options that are not “beacon driven” but “common sense driven”.
If you’ve had a past bankruptcy, we can help you. We have solutions for such situations.
When you have less than 20 percent down, the policies are fairly “cut & dry”, because you’re required to get mortgage insurance either through CMHC, Genworth or Canada Guaranty. They all require that a previously bankrupt client be discharged a minimum of two years as well have two years re-established credit before an insured mortgage is offered with a five or ten percent down payment. Having said that however, if your two-year, post-bankruptcy waiting period is not yet past but you’re almost there, in some cases we may still be able to get you mortgage financing, provided you have a minimum of 10 percent of the purchase price.
Now, if you have 20% or more as a down payment, we have lots of flexibility when it comes to lending guidelines. In these situations, requirements both for the re-establishment of credit and time since discharge are varied amongst our lenders, and we’re confident we can find one that would work for you.
In addition, if you’ve recently just gotten out of bankruptcy or close to being discharged, and are looking for some advice both on re-establishing credit and wanting to know what it will take for you to qualify for a mortgage in the not too distant future, check out our Rent No More in 24 program.
Lender/Broker Fees for a Bad Credit Mortgage
With bad credit mortgages, it’s the client that pays the mortgage broker for arranging a mortgage on their behalf. This fee is typically paid on closing and is usually based on a percentage of the overall mortgage.
Additional fees may be charged by our lending partners, if needed.
Our typical brokerage fees for mortgage scenarios as outlined above start at 1% of the total financing amount, and are usually deducted from the mortgage proceeds when your mortgage is funded. At Auxilium Mortgage, we pride ourselves on transparency. Once we’ve received your application and reviewed your file, we will discuss these costs up front, thereby avoiding any unpleasant surprises.
If you are looking for a bruised or bad credit mortgage, feel free to contact one of our Mortgage Professionals to find out how we can help you achieve your dreams of home-ownership.