How can a person with bad credit purchase a home in Canada?

The excellent news is it is possible to get a mortgage in Canada with bruised or poor credit. In Canada, we have two types of mortgages: conventional and high-risk.

A purchaser requires a high-risk mortgage when he or she has less than a 20 percent down payment. Lenders must insure the mortgage through one of the three high-risk mortgage insurers, which are Genworth, Canada Guarantee and CMHC. Unfortunately, to get a high-risk mortgage, a borrower must have good credit as this is a requirement of not only the banks and other various lenders but also of the insurance companies.

Therefore, if you wish to purchase a home with less than 20% down payment, you must have good credit.

A good credit score is anything over 680. As of July 1, 2020, CMHC changed its policy regarding credit scores and requires at least one applicant to have a score of over 680 to qualify for a high-risk mortgage with the minimum score being at least 600. All lenders will also have their own credit requirements for high-risk mortgages, which usually means the score must be well over 600.
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We can offer financing to those with bruised credit if they have a 20 percent down payment or more. With bruised credit, “B” lenders, also known as alternative lenders, can offer borrowers financing that is still competitive (usually 1-2% more than Prime lenders are offering).

For more information, feel free to call or write. 

Sarah A. Colucci
Mortgage Agent Lic. M14000929
Mortgage Edge Broker 10680
Direct: (647) 773-4849

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