• Getting A Mortgage With Bad Credit? What Is The Real Cost?

    September 2, 2020
  • Getting A Mortgage With Bad CreditWhat is the Real Cost of Getting A Mortgage With Bad Credit?

    • Can I really fix my credit?
    • What will it cost me both financially and emotionally?
    • How much time does it take to repair? It depends.
    • Is it easy to get ripped off?

    Let’s examine.

    On the surface, this young couple appeared to have it all: a strong marriage, great job, two kids and a beautiful home on the Hamilton Mountain. What could go wrong? Well, the older child was in and out of hospitals from age 1 through 8 until she was finally diagnosed correctly and has been healthy ever since. The other child was going to daycare with monthly costs of $1250. She had to quit her job and take a $50,000 pay cut just to be close to the children’s hospital. Credit issues started and the family began incurring financial difficulties. Life happens but it is how you react to adversity that builds your character.

    Who Qualifies for Mortgages with Bad Credit?

    It should be stated that all cases are different.

    • Most candidates should have a credit score of over 500
    • Credit proposals and bankruptcy must be paid prior to receiving mortgage money (in some cases they allow you to refinance to pay out credit proposals and bankruptcy)
    • Most financial institutions only allow one bankruptcy
    • Sub-prime mortgages are usually given in urban areas (rural areas are much tougher)

    What is Real Financial Cost of a Sub-Prime Mortgage?

    We will use the real-life example of the couple used in the story above. The couple amalgamated all of their debts.

    Mortgage Amount = $536,000
    Rate = 3.99%
    Amortization = 25 years
    Mortgage Payment = $2816.56

    Appraisal Cost – $375
    Estimated Legal Fee – $1500
    Lender Fee (1%) – $5860
    Lender Annual Maintenance Fee – $475
    Title Insurance Fee – $337.87
    TOTAL COSTS = $8,047.87

    Our young couple has done a great job re-establishing their credit in the past year. Not only did they improve their cash flow, but they now have been approved for a five-year mortgage with a fantastic lender. Their new rate is now 2.24% with only an appraisal fee. Their monthly savings are $500. The question becomes whether it was worth spending $8000 in costs to improve their credit. This couple can now breathe as their cash flow continues to improve. The savings will compound forever and the obvious answer to the above question is YES! It was worth it. The real cost is that it pays for itself.

    Robert Floris has been in the mortgage industry for 30 years, including working as a Sales Manager for a major chartered bank. Over his career, he has personally lent over 1 billion dollars and proudly continues to advise and tutor his valuable clients.

    Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

    If you would like to apply for a mortgage online, please follow this link.

    If you would like to see our Google reviews or leave one yourself, you can do so here.

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