Bruised credit with credit scores from 400-680
So long as you have income, have at least 20% worth of equity or down payment and your property is in a desirable location, you are still able to qualify for a mortgage without having to proceed with a private or equity mortgage.
What will B lenders look at with bruised credit?
They want a basic understanding of what has happened and how proceeding with a B lender mortgage will improve your situation.
Usually it is a case of a personal position where you have over-extending unsecured debts such as credit cards, lines of credit, car finance/lease payments along with a mortgage etc.
Where the above is the case, these B lenders are able to consolidate your debts by using the mortgage proceeds to pay them off. The benefit to you is clearing up your credit, paying a lower rate of interest and it is under one monthly payment. After 1-2 years most people are able to refinance/switch to an A lender, so long as income can meet the A lender requirements. Worst case scenario, you can renew with the existing B lender for another 1-3 year term.
Summary
B-lenders play a vital role as not everyone’s credit and income are always going to fit with A lender criteria 100% of the time.
People’s lives are variable. You may have perfect credit, but then something can come about such a death in the family, divorce, extended themselves with unsecured credit, loss of income etc.
B-lenders provide a fantastic solution to help repair your status so that you can eventually get back on track to A lender status.
I am a firm believer that each individual should be able to have low-rate financing, even if you have to use a B-lender or private financing for 1-3 years.