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Sub Prime Lending

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While credit rating is one of the biggest factors lenders consider when approving a loan, people with poor credit are not necessarily shut out from homeownership. Poor or bad credit occurs when your credit score is below 630. Credit histories and lower credit scores are compiled by credit reporting agencies, such as Experian, TransUnion, and Equifax.

If you have a poor credit score, then sub-prime mortgages will be your best option. Here at Winnipeg Mortgages, we are proud to offer a bad credit mortgage program. While there are other subprime lenders that will work with you if you have bad credit, they will often charge a higher interest rate and add on numerous fees. With us, you will get a fair shake with great rates and no hidden fees.

You can contact us today and schedule a consultation to know if the subprime mortgage is the best option for you.

What is a

subprime mortgage?

Understanding what you are getting into is the best way to avoid any trouble down the road. A subprime mortgage is a home loan given to borrowers with poor credit (a FICO score of 620 or below). With a low credit score, lenders in the subprime mortgage market only offer this type of loan and not conventional or any additional mortgages. Due to the higher risk of default, these loans have higher interest rates than other home loan products.

While people with bad credit are often given subprime mortgages, this does not mean that all subprime mortgages are given to people with bad credit. Some people may have good credit but simply cannot qualify for a conventional mortgage because they don't have a large enough down payment or they have too much debt.

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How do subprime

mortgages work?

You need to be a Canadian resident to be able to apply and qualify for subprime mortgages. The main criteria that we're going to look at are:

  • The value of the property
  • Your current income
  • Your credit score, credit history
  • And down payment


    • You will also need to provide documentation such as:

  • Identification
  • Proof of residency
  • Employment verification, Employment history (or Self-employment income)
  • Income verification (pay stubs, letters, income tax returns)
  • The information about the property you want to purchase


    • Expect an interest rate of 1 to 3% and shorter periods of amortization, close mortgage terms, higher origination fee, and monthly mortgage payment. While these numbers seem to be high, it is still better than renting out a property.

    Types of

    Subprime Mortgages

    As a borrower, you have different options for subprime mortgages. The four most common types of subprime mortgages are:

  • Fixed-rate mortgage - These have interest rates that stay the same for the entire term of the loan, usually 30 years.
  • Adjustable-rate mortgage (ARM) - The interest rate on these loans starts low but can increase or decrease over time, usually every 6 months to 5 years.
  • Interest-only mortgage - With this type of loan, you only have to pay the interest for a certain period of time, usually 7 to 10 years. After that, you will need to start paying both the interest and the principal.
  • Dignity mortgage - A hybrid of subprime and conventional loans, dignity mortgages is where the borrower agrees to pay a higher interest rate for the first years. The rate is lowered to a more manageable level after a certain period of time has passed given that on-time payments have been made.

    • The best way to find out what type of mortgage is best for you is to consult with a professional. Talk to one of our specialists here at Winnipeg Mortgages and learn more about the subprime mortgage program.

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    Why you should

    consider subprime loans?

    y you should consider subprime loans? If you are having a hard time applying for a loan from traditional lenders, then going to a subprime lender might be a good idea. Subprime mortgage lenders typically accept people with bad credit. The main downside of a subprime mortgage is the higher interest rate compared to a traditional mortgage. But if you can afford the higher mortgage payments and just can't do anything with your credit score, then a subprime mortgage loan is a good option. Other than that, here are some advantages of a subprime mortgage:

  • You can own a house - The main reason why people apply for a mortgage is to own a property. And with a subprime mortgage, you can achieve that goal.
  • You can improve your credit score - As long as you make your mortgage payments on time, your credit score will slowly improve. This will give you a better chance of qualifying for a traditional mortgage in the future.
  • You can get a lower interest rate - If you have a good payment history with your subprime lender, they may offer you a lower interest rate in the future.

    What are the requirements

    for a subprime mortgage?

    The requirements for a subprime mortgage are not as strict as a traditional mortgage. But there are still some things you need to meet in order to qualify.

    Here are the requirements for a subprime mortgage:

    You must be a Canadian resident.

    • The value of the property must be less than $1,000,000.

    • You must have a minimum down payment of 5%.

    • You must have a minimum credit score of 600.

    • You must have a steady income and employment history.

    • You must not have had any bankruptcies or foreclosures in the past.

    • You must not have any current delinquencies on your credit report.

    • Aside from this information, we might ask you for other documents to support your application.

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    How can I apply for a

    subprime mortgage?

    Here at Winnipeg Mortgages, we make sure to simplify the process for you. We understand that buying a property can be overwhelming, especially if it's your first time. But with our help, we can make it a breeze.

  • To start your application, you can either give us a call or fill out our online form. One of our mortgage specialists will then get in touch with you to discuss your options.
  • We will then collect the necessary documents from you and submit them to our underwriting department. Once your application is approved, we will give you a call to schedule a closing date.
  • On the day of your closing, we will go over the final details with you and answer any questions you may have. We will then sign the mortgage documents and transfer the funds to your account.


    • It's that easy! So don't hesitate to apply today.

    Contact Us

    Get started with your home loan with the help of our experts at Winnipeg Mortgages. We'll guide you through the process and help you find the best mortgage for your needs. Call us today and see if you qualify for a subprime mortgage.

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