How to Get a Mortgage With Bad Credit


Find a Bad Credit Mortgage Lender

If you have a credit score in the 600-700 range or above, you should be able to get a mortgage loan from one of the big banks, commonly referred to as “A lenders”. If, on the other hand, you have a credit score below 600, most of Canada’s big banks will not approve you for a mortgage loan. Instead, you’ll have to look for a “B lender” or “subprime lender”; these financial institutions, including trust companies, work almost exclusively with people that do not have ideal credit scores. And if you’ve gone through a bankruptcy or consumer proposal recently (within the last two years), you may even need to work with a private mortgage lender. If you’re working with a mortgage broker, they should be able to put you in touch with a lender they know will work with you.
First, lenders can charge…

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Do I need to get pre-approved for a mortgage before shopping for a home?

During the height of the real estate boom, getting a mortgage was much easier than it is in today’s market. Today, the first step in landing a home loan is obtaining a letter of preapproval. This means a mortgage lender has verified that you re approved for a mortgage of a certain amount over a fixed time frame. Preapproval letters are prepared even before you have picked out your home. They remove some of the uncertainty in the home-buying process. In the current housing market, many real estate agents and sellers won’t want to work with buyers unless they have one.
With a letter in hand, buyers know exactly how much they can borrow and therefore how much house they can afford. A preapproval letter shows the seller and the seller s agent that the buyer is capable of buying their house. For most sellers, the issue is not whether they can get an offer, but whether they can close the deal. Agents see preapproved buyers as more serious (and more valuable) because they have taken proactive steps to secure a preapproval. It also saves the buyer and the agent valuable time knowing exactly what price range to search out homes for the buyer. When it is time to make an offer, a
preapproved buyer will be in a better position to negotiate the purchase

Here is what home buyers need to know about the new rules of mortgage pre-approval.

1. Shop around. And shop early.
When seeking preapproval, talk to a few different mortgage lenders to find the best mortgage package that suits your needs. Two or three lenders is customary. More aren’t necessary to get a good deal because loan packages are generally very similar and pricing tends to be comparable. And consult with lenders before you start house hunting. This way, you’ll know how much you can borrow and which houses are in your price range.

2. Prepare your financial biography.
Getting preapproved means a lender must review and verify a home buyer s income, credit and assets to ensure he can make the necessary monthly payments on a house. In the wake of the housing bust, borrowers must be more forthcoming when it comes to their finances. Your lender should tell you precisely what you need, but be prepared to include:

  • W2 statements (or 1099 income statements) for the last two years
  • Federal tax returns for the last two years
  • Bank statements for the last few months
  • Recent pay stubs and proof of other income
  • Proof of investment income

3. Know you’re not obligated to one lender.                                                                                            Pre-approval doesn’t bind you to a particular lender; It’s just a promise — albeit, a conditional one — that the lender is willing to make the loan. The buyer isn’t obligated to borrow from that lender. A preapproval will stipulate the loan amount or monthly payment but not necessarily the loan type or rate. When you apply, lenders use that day s mortgage rates to estimate costs and payments. Just don’t expect them to keep the same rate they preapproved you with as the actual rate that will be available when you find a property and sign a purchase contract as rates can change.

4. Keep an eye on your credit score.
Usually, a loan inquiry can ding your credit score. If you applied for a bunch of credit cards within a short period of time, for example, your FICO score might fall. (Most lenders use some version of the FICO score to determine your eligibility for credit and what interest rates and other terms they should extend to you.) But the credit-scoring models are designed to allow for mortgage loans. The score ignores mortgage, auto and student loan inquiries made during the 30 days prior to scoring. So if you find a loan within 30 days, the inquiries won’t affect your score while you’re rate shopping, according to Also, the score looks at your credit report for mortgage, auto and student loan inquiries more than 30 days old. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score.

5. Deal only with a reputable lender.
Sellers now are looking much more closely at who the buyer s lender is. To avoid instances in which the lender might not be able to deliver on the loan, they want to see that any prospective buyer is working with a financially sound and reputable lender . Most national brokerages and banks have local branches, so buyers should ask a local realtor (and the buyer s agent who is representing them) for recommendations. To satisfy any doubts you might have about a particular lender, visit the Better Business Bureau’s web site to find out what kind of reputation they have.

6. Watch the clock.
Preapproval letters and the documents they verify have expiration dates. Those dates vary by lender, but the letters are typically valid for 90 days. If you are still house hunting after, say, 60 days, and you are concerned, ask your lender to re-validate the preapproval letter. Sellers want to be sure the buyer s financial situation hasn’t changed since the time the lender initially checked them out. If any part of your financial picture has changed your credit, job status, income or assets, for example you should notify the lender so your pre-approval can be adjusted.

Palm Tree Realty, LLC works with buyers and sellers in both residential & commercial properties. I would appreciate the opportunity to go to work for YOU! or call Debbie. 618-709-0909

Is now a good time to buy a home?

With low interest rates, falling home prices, and rising rents, owning a home is a more attractive proposition than renting in many, perhaps even most U.S.cities.  It’s more affordable to buy a house today than it has been in ages.  In fact the National Association of Realtors says houses were more affordable in 2012 than they had ever been since the group began tracking the data in 1970.  Today’s high affordability combines two factors; low prices and low interest rates.  This could be a once-in-a-generation opportunity to buy real estate.

The National Association of Realtors expects rents to increase almost 4% in 2012 and another 4% in 2013.  While rising rents might be a downer for apartment hunters, it can translate into a bright spot when it comes to home sales.  Higher rents tend to push certain renters into considering home ownership when the financial benefits of owning outweigh the flexibility of renting.

To find out if becoming a “homeowner” is right for you, call one of our real estate professionals at Palm Tree Realty, LLC.

To qualify for an Illinois Real Estate Broker License in the State of Illinois you must be at
least 21 years old, a high school graduate or equivalent (G.E.D.), successfully complete the
required coursework and pass the state licensing exam. Effective May 1, 2011 the Broker
license category replaced the former Salesperson license category.

Take the Required 90 Hours of Pre-License Education
The new Broker license has the same privileges of the previous Salesperson license
category, but requires additional education to include 90 hours of pre-license education, 15
of which must be interactive (classroom or webinar) and 30 hours of post-license education.
The 90 hours would include a 75-hour Broker Pre-license Topics course and a 15-hour
Broker Pre-license Applied Real Estate Principles Interactive course. There are many choices
available to achieve the necessary education through Classroom Education Courses,
Online courses, and Home Study Options. Classes are offered locally at Lewis & Clark
Community College as well as Greater Gateway Association of Realtors in Glen Carbon, IL.
For more info on education options and locations, please visit and click on the link: How do I get my real estate license?

After I Complete My Education Requirements, then what?
I have a link on my website that will further explain the process after the education
requirements have been met. Please go to: and click on “How do
I get my real estate license?”

Continue reading How to get a Real Estate License in Illinois