For many Canadians, the dream of homeownership is just that – a dream. Some people just can’t afford to buy their own home and are perfectly content with renting an apartment. Achieving homeownership has become increasingly difficult in recent years, and for those with bruised credit, the challenge can seem insurmountable. Let’s look at these challenges and what a typical homeowner like you can do to overcome them and be able to buy your own house.

What is Bruised Credit?

Bruised credit is a term used to describe a person’s credit history when it has been damaged by late or missed payments, collections, or other negative marks. Bruised credit can make it difficult to qualify for a mortgage and often results in higher interest rates and fees.

How Can I Buy a Home With Bruised Credit?

There are a few options available for those looking to buy a home with bruised credit. One option is to work with a credit repair company to improve your credit score. This can be a time-consuming and expensive process, but it can be worth it in the long run.

Another option is to work with a subprime lender. These lenders work with borrowers who have less-than-perfect credit and may be able to provide you with a loan despite your bruised credit history. However, subprime loans often come with higher interest rates and fees, so it’s essential to compare offers carefully before choosing a lender.

What are the Risks of Buying a Home with Bruised Credit?

The biggest risk of buying a home with bruised credit is that you may end up with a loan that you cannot afford. Be sure to carefully compare loan offers and choose a loan that you are confident you can repay. It’s also important to remember that your credit history is an important factor in determining your interest rate, so even if you are able to qualify for a loan with bruised credit, you may end up paying more in interest and fees over the life of the loan.

Steps to Take When Your Credit is Bruised

Your credit score is one of the most important factors in determining whether or not you’ll be approved for a mortgage. A high credit score will give you a better chance of being approved for a loan with a lower interest rate. A low credit score could result in a higher interest rate and could mean you’ll have a harder time being approved for a loan at all.

If your credit score is bruised, there are a few steps you can take to improve your chances of being approved for a mortgage:

1. Check your credit report for errors and dispute them if necessary.

2. Pay your bills on time and keep your balances low.

3. Use a credit counselling service to help you get back on track.

4. Get a cosigner for your loan if necessary.

5. Save up for a larger down payment.

6. Wait a year or two to apply for a loan.

Conclusion

It’s possible to buy a home with bruised credit, but it may require some extra work and creativity. There are a few things to keep in mind, such as the importance of a strong credit score, a down payment, and a clear plan to improve your credit. With a little effort, you can still find a lender who is willing to work with you.

At Mills Financial Group, we know how important it is to invest your hard-earned money into your dream home. It’s for that very reason why we are here to help. We are here to help you overcome the fears and obstacles of home buying and loan applications. Whether you’re a first-time home buyer or not, Mills Financial Group is at your service. Contact us today to schedule an appointment.