AK Mortgage Plus

Mike Doyle (STI)                                       

Mortgage And Investment Consultant

103 - 7337 137th Ave Surrey BC V3W 1A4 Phone 604-230-6790 Fax (Toll Free) 866-849-0822

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Mortgages

• No Down Payment and Cash Back Programs
• Self Employed Program
• Time to Renew Your Mortgage?
• Challenged Credit
• Pre-approvals

Investments

• Earn 15% on RSP Eligible Investments
• Current Investments Available

Forms and Booklets

• A Guide to Financing for First Time Buyers
• Property Transfer Tax
• Understanding your Credit Score
• Closing Cost Worksheet
• Househunting Worksheet
• RSP Withdrawl Form

Mike Doyle

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Challenged Credit

For potential home buyers and home owners who have had difficulty with credit in the past, are new to the country, or cannot prove income there are alternatives available to you.

Many lenders now are carving out a "niche" for themselves and trying to capture a mortgage market segment unique to themselves. One such niche is clients who have challenged credit, including bankruptcy. These lenders are not the mainstream institutions. They are "mortgage companies" who specializing in mortgage only lending. Several of these institutions focus on challenged credit.

Major Canadian banks cannot offer credit to challenged credit clients due to risk portfolio guarantees they offer their investors. Most investors would shy away from investing/buying stock in a  financial institution if they believed that the institution was providing loans to clients who have had difficulty paying back previous loans, regardless of the circumstance. As a result, clients are advised to seek mortgage and credit elsewhere.

The structure of the financing is either; one mortgage up to 75% of the value of the home or a combination of a first and second mortgage, if the loan amount exceeds the 75% threshold. The first mortgage is through an institution and the second is usually through private lending sources. In many cases however, where the credit is challenged but acceptable, lenders will consider providing one mortgage up to 85-90% of the home's value.

For "Challenged Credit" clients some of the obstacles that are overlooked in their mortgage qualification requirements are as follows:

• Minimum Down Payment/Equity Needed
• Income Requirements
• Property Requirements
• Minimum Credit Requirements
• Previously Bankrupt
• Lender/Broker Fees

In a challenged credit situation, the down payment is everything. If the mortgage loan goes in to collection, the down payment/equity provides a cushion for the lenders while they go through the legal proceeding to gain the right to reposes the home. Therefore, the lenders will look for a minimum of 15% of the value of the home in down payment/equity. (e.g. $200,000 X 15% = $ 30,000). Occasionally, exceptions are made whereby 10% down payment will be sufficient. That will depend on how the other aspects of the applicant's qualifications stack up such as income and the extent of the damage to the credit. 

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