What to Know about a Bad Credit Mortgage

As a rule, to buy a home you must have 20% down and a good credit history. But there is still good news for the bad credit “owners”: in fact, there is no need to have large down payment or perfect credit order to purchase a home. This article aims to explain the characteristics which mortgage lenders regard as a bad credit mortgage. Usually consumers and lenders precept the definition of a bad credit mortgage in a different way, this fact then leads to various misunderstandings.

Common Red Flags for Mortgages Lenders

Pattern of Delinquencies – it is a record of your late payments which is always possible to work around, but most lenders will give you much more scrutiny if such a record is not perfect; in the case of some problems with this paper you chances on getting not just bad credit mortgage but any second mortgages falls considerably.

Late Payments on Student Loans – in case you had any late payment on student loans within the past year, you are much more likely to be approved for conventional financing, something like FHA – governmental financing.

Late Payments on Mortgages – only one single late payment in the past year is permitted, but just in case you are able to explain it and provide your second mortgages lender with all the required documents.

Getting a Second Mortgage with Bad Credit

You should know about a thing called investor overlays. These are adjustments to guidelines or pricing which are created in favor of the lender. It is important to know because this is exactly that fact why one lender can provide you with second mortgages even with bad credit or minimal down payment, and another one cannot do the mortgage in some instances.

Later these are overlays which protect lenders against any potential future losses from the second mortgages they originate, conserving all the profit margins and buyback risks. In another way, it can shift the risk which is translated to cost – on to the consumer. This is done by limiting the ability to borrow via higher mortgage’s fee, it also reduces purchase price, or lowers debt ratio.

Note: Every bad credit mortgage lender has his or her investor overlays, it is the way how all mortgage companies operate, the crucial idea is to find and then work with that bad credit lender whose overlays are minimal.

Do Some Homework

  • Credit score. Before applying for any bad credit or second mortgage check your credit score. Get a copy of your annual credit report free, this information can help you when choosing the appropriate mortgages lender.
  • Documents. Get as many documents as you can to support your credit story and its challenges to be able to explain it to the lenders from A to Z if asked during the process of applying for second mortgages.
  • Specification. When you are talking to any potential mortgages lender, always try to be very specific. Do not be afraid to explain everything in great detail about your needs and concerns. Give the most complete description of your situation. Also before even explaining anything ask the lenders about any special conditions that they have for their bad credit mortgage customers in order to save your time and money from the very beginning.

Some data for the article was taken from the Knowledge Base of Mortgage Canada Wide Financial Company that provides second mortgages in Toronto and GTA.

Virtual Banking Isn’t For Me

Hubby and I recently switched banks in an effort to save money on bank fees. We didn’t leave our former bank on bad terms, we were just looking to free up a little room in our monthly budget so we switched to a no-fee bank.This change hasn’t been without a few bumps in the road but yesterday was my breaking point.

It’s 2013 and I still get my paycheque in physical cheque form. I’m not kidding. I think I’m the last person in the world who gets paid this way. I went to university for six years to get this education you’d think my employer would offer direct deposit but the fact is that there are less than ten employees and direct deposit is very expensive. Our office manager can take care of it all. Though it can be a bit of a scramble to get paid on time when the boss is on vacation, they’re pretty good at making sure we have it on time, often paying is early if needed.

Needless to say, having holds on deposits for us is not an option. We can’t afford to deposit my income and have it held for five days while the cheque clears. It would totally screw up our budget and bill paying system. When I brought these points up to our current bank they basically said there’s nothing they can do other than offering us an immediate access to funds upwards of $200. Sorry this isn’t going to work. I called to complain yesterday and asked to speak to the supervisor. She basically said her hands were tied, there was nothing they could do to help us.

If I had an actual branch to deal with would be more options for us in terms of immediate access to funds; or with teller services, having certain cheques cleared.

I respect that new customers at banks may have a short initiation period of sorts but c’ommon! I mean charge my $2000 or something if I have an NSF, I don’t care what you feel you may need to do to cover your asses I just want immediate access to my money. If we had a bad history I get that, but we don’t.

I didn’t realize how much I enjoyed the amenities of a traditional banking system until I didn’t have them. Though I rarely use the teller services, I like having the option when issues arise. I like figuring problems out face-to-face and building relationships with the people who hold my money. I miss being able to call the bank to ask Betty/Bob/Ben a question. I miss the people.

And so, next week hubby and I have an appointment with the bank that holds our mortgage and RESP to see what we can work out in terms of opening new accounts with them. Based on the conversation I already had with them it sounds promising.

I’m looking forward to sitting down and getting to know people again. Put faces to names and trust the people who hold our money.

What sort of accounts/banking system do you use?

Money, Feminism and Divorce?

Source: Pinterest

I listen to the radio pretty much all day long. Especially since being home on maternity leave, I hate silence so I usually keep it on in the background. Last night, while doing the dishes (because our dishwasher is broken…sigh) during some talk-radio, life-lesson-type of program, they started talking about why divorce rates are so much higher today.

This radio program started discussing various reasons behind divorce and, according to them, they feel the number one reason marriages are splitting up nowadays is because women are taking more of a financial lead in their marriages, making more money, protecting themselves financially and ”no longer need their husbands to support them, or their families, anymore”.


My first instinct was, interesting. I guess I hadn’t thought about that before. While it’s true the role of the woman in the average North American household has changed dramatically in the past 50 years is this really the number one reason behind divorce today? Because woman make more money?

I have a hard time believing divorce rates are higher today than they were 50 years ago because the woman in the house suddenly, according to this show, has more ‘power’ or say in the running of the household expenses.

I think divorce rates are higher because of a breakdown of financial communication and laziness.


I’m strictly talking about money. Especially in today’s world of plastic, we all know (to well) how easy it is to swipe now and think about it later. Our grandparents didn’t have this luxury. When they were young newlyweds they actually had to use cash or cheque, and have the cash in-hand to pay for something. I’m not suggesting they didn’t frivolously spend and buy a new toaster or hot curlers for their hair instead of budgeting for food or gas, but they paid with money they already earned.Communication about money in their marriage was almost forced. Even if the woman was a homemaker who was given money from her husband to maintain the house (food, gas, clothing), she quickly found out if there were money issues going on if she wasn’t getting her household cut to buy things the family required. Secrecy was a rarity.

Fifty years ago, if you wanted to discuss something, especially finances, you were required to see the person and discuss your issues face-to-face or at the very least on a land line. You didn’t have the luxury of hiding behind e-mail or text messages. You had to discuss the matters in person or over the phone and if you wanted to work things out you needed PAPER and a PEN, again, excel and fancy budgeting programs didn’t exist.

My Opinion

Source: Pinterest

Source: Pinterest

While divorce happens for many reasons, I don’t think it’s fair to say that women now leave because they’re more financially stable. While this may be true, I think the real reason women leave is because they don’t want to face the music and deal with financial issues the hard old-school way. Leaving and starting over on her own is, unfortunately, often easier than putting the HARD effort into the marriage that is required to make things work again.

Then again, who would honestly answer that question on a questionnaire? Especially when a divorce is happening, because as you may know, it’s always the other persons fault anyway. It’s difficult to get a true reason in the heights of emotion. I just think the points brought up by the show were off a little and it’s not their fault; it’s because no woman, especially a financially stable one, blazing her way through her new-found path to freedom, would want to honestly say ”I gave up” or ”I didn’t want to put the effort in”.

I know marriages breakdown for many reasons and require two people to fail. I’m strictly arguing the points of this show which were female centered.


How Selling Lemonade Changed How I View Money

I think most people have some ”a-ha” moment about money while in their transition from childhood/student life to adulthood. For me it was a story I read in Reader’s Digest last year (although I have no idea how old the copy was). We have copious amounts of copies of Readers Digest in our waiting room at work. I don’t often read them but when patients don’t show up or cancel last-minute sometimes there isn’t much else to do.

I am very much paraphrasing the ideas of the article and will probably not get all the details right, so I apologise in advance, the main point of the story remains intact though.

It was a story about a young boy, who at a young age (something like 6 years old), decided he wanted to make some of his own money while his parents hosted a yard sale one summer morning. With the ”initial investment” from his parents of about $5.00, he set up a lemonade stand selling glasses at 0.50/cup. He ended up making something like $20.00 that day alone. He explains that he re-paid his parents and put his $15.00 profit in his piggy bank.

Over the next few summers he continued selling lemonade at every opportunity, always saving his profits. It wasn’t until he was something like 9 years old that he told his dad that he wanted to get out of the ‘lemonade business’ and buy a lawnmower. His parents had no idea that in the past few summers their son had made, and saved, hundreds of dollars selling lemonade. Enough to buy a nice self-propelled gas lawnmower which will help him on his next entrepreneurial endeavor.

Let me explain how smart and business savvy this child was. He took his lemonade profits, bought the lawn mower but had no intention of wasting his childhood away mowing lawns, instead he would hire someone older, stronger, and more experienced to do the work for him all while making a profit himself.

He reached out to some older kids he knew and offered them a summer job mowing lawns. He would provide the lawnmower, gas and nail down a few regular clients in the neighborhood (ensuring job security) but the older boy would do the work. He charged $25.00-$40.00/lawn depending on size and paid the older boy $15.00-$25.00/each lawn. Between the regular clients and the occasional cuts for people who were on vacation etc, they young boy profited something like $3000 for basically doing nothing (other than being the mastermind behind the operation) and the older boy made even more. Win-win situation. He was 9 years old!

He did this for the next few summers and eventually bought a few lawnmowers, hiring someone to man it each time, and carved out quite a name for himself in the lawn care industry in his community.

I don’t remember the story-ending details, and I don’t want to make something up, but I feel like this kid went on to university (totally paid for between his savings and scholarships to a business school). At the time the article was written, he was something like 20 years old and on his way to being a millionaire by the time he was in his late 30’s due to smart investments.

I was flabbergasted when I read this story about the sheer intelligence and savvy mind of this kid. How does a young 6-year-old even think about such a business model? Most kids are playing with toys and concerned about what their friends are doing for the summer, not how to start-up and maintain a business.

And this is how selling lemonade changed how I view my money and forced me to look at what I’ve accomplished financially in my 28 years on this earth (which, sadly is basically nothing).

Has a story every changed how you view money? What do you think about this story?


Lemonade Photo Source

Lawnmower Photo Source