A bad credit mortgage is an option for people with a less than optimal credit score who are looking to finance their purchase of a home. A credit score is a number that gives lenders an idea of how safe or how risky it would be for them to provide their services to you. In Canada this number goes from 300 to 900, and the higher the number the better your credit score is. You build your credit score and your credit history over time by consistently and reliably paying off loans and debts, such as student loans, car loans, and credit cards. If your credit score is lower than what is ideally asked for you may still be eligible for a bad credit mortgage. A bad credit score typically indicates financial difficulties in the past, such as people who have experienced bankruptcy or have had difficulty paying back their loans. 

If you have a poor credit score and are thinking of applying for a bad credit mortgage there are some things to consider first. Lenders will look at many things during the application process but will typically focus on: Credit Score and Debt History: A credit score and your debt or credit history provide a quick snapshot of your risk profile for a lender. Your credit score will determine whether you are eligible for a regular mortgage or will have to finance your home purchase with a bad credit mortgage. Credit scores in Canada range from 300 to 900 with a higher score being better. If your score is lower than 700 or you have a history of missed payments you may have to opt for a bad credit mortgage. Income and Employment History: The primary concern for a lender is if you will be able to pay back the loan reliably over time. As such they will be looking at your income and employment history when you apply for a mortgage. If your credit is below ideal and you have a low income or an employment history that is difficult to verify then you may be required to apply for a bad credit mortgage. Property: Any time you apply for a mortgage the lender will want to look at the property. They will look at the state of the construction and required maintenance costs of the property, the area it is in, and if they consider it affordable for you. If you are applying for a bad credit mortgage the lender may be stricter with the type of property they are willing to finance. Down Payment: In Canada the minimum down payment on a property is 5% with that amount rising to 10% of a property that is valued over $500,000.