Many people believe you cannot finance or refinance a mortgage if you have poor credit. While it is true that people with poor credit won’t meet the lending criteria for traditional mortgages, there are still viable options to access the mortgage products you need.

Consider some of the following tips to help you refinance your mortgage.

Have Equity in Your Property

There are many reasons people refinance their mortgages, from making home repairs to consolidating debt. Yet circumstances are not always ideal for getting approved for financing, preventing you from accessing mortgage products.

If you have owned your property for a while, you have likely accumulated equity in your home. Equity is the difference between the market value of your property and the outstanding balance on your mortgage. The more equity you have, the more security a financial institution has when they consider lending to you.

The amount of equity you require for approval will depend on the size of the loan, your credit history, and having stable employment. 

Consider Government Insured Loans

Government-insured loans guarantee your mortgage for the financial institution should you default on your loan. Policies are approved through the Canadian Mortgage Housing Corporation, or CMHC, and help when your down payment is less than 20%. 

The applicant's property value and down payment determine the CMHC premium. There is an approval process; however, CMHC requires less down payment with only 5% for mortgages under $500,000. For mortgages between $500,000 and $999,999, CMHC requires 5% for the first $500,000 and 10% for the remainder. CMHC will not cover loans over $1,000,000. 

Financial institutions feel more secure about lending to you with a guaranteed loan, even with poor credit.

Get a Reliable Co-signer

Your poor credit history is likely making you question how to refinance your house . Unexpected job loss, illness, or repairs set you back, and your credit takes a hit.

All is not lost if you don’t have adequate equity in your property for approval. If you have someone willing to co-sign your loan, lenders will look at the viability of their credit, repayment ability, and any additional collateral.

If you can prove you are trustworthy to make your payments, they may be willing to co-sign for you. However, keep in mind that should you default on the payment, the lender will turn to them to make the payment and seize their asset against the outstanding balance in the worst-case scenario.

Work With a Mortgage Broker

Navigating mortgage refinancing on your own can be stressful and overwhelming, especially when struggling with poor credit. 

Enlisting a bad credit mortgage broker gives you access to lending products and institutions outside of traditional banks' mainstream lending. They know where your opportunities lay and what work you need to do to be approved finally. 

While you will likely pay higher interest rates and have fees to contend with, your mortgage broker can negotiate to get the best deal possible for you. In addition, a broker’s invaluable advice and guidance can save you from great frustration and costly mistakes.

Ready to Refinance Your Mortgage?

If traditional lenders have declined your mortgage application, it’s time to enlist a professional mortgage broker with experience getting applicants with poor credit approved. 

The brokers at EasyMortgageLend.com have over 15 years of experience helping people access the financial products they need to refinance their mortgage in Ontario. With digital appointments, they believe mortgages should be accessible by everyone and are ready to help you!

DON’T WAIT! Apply online or by calling 647-895-3921.