Private Mortgage Solution for Borrowers with Maxed Out Credit Cards

What You Need To Know

A credit card is a payment card issued to a borrower (cardholder) that gives the person the ability to buy now and pay later. When making a purchase on a credit card, essentially the borrower is taking out a short-term loan. In exchange for the amount spent on the card, the credit card issuer will charge interest on the amount owed that is outstanding past the due date.

A maxed-out credit card is a credit card that has been used to its full limit. Repeatedly maxing out a credit card can be detrimental to the creditworthiness of the borrower. Especially when the borrower is unable to pay off the outstanding balance plus interest accruing since the purchase date.

Unpaid and overdue credit balances tend to accrue double-digit interest rates that are almost always spiralling up to unmanageable personal debt. To stop the accumulating debt, borrowers can consider paying off their credit card debt with a mortgage solution from private lenders who have more flexible lending guidelines focusing on the value of the property and less on the creditworthiness of the borrower.

At Canadian Private Mortgage, our clients know that we won’t steer them into any products or financial terms that don’t fit their personal goals.

Our private mortgage solution for borrowers with a maxed-out credit card debt is ideal for property owners who are willing to improve their borrowing habits and return their financial situation back to normal. Any proposed lending solutions will include an exit strategy that enables clients to get back to normal as soon as possible.

Lending Solution For Borrowers with Maxed-Out Credit Cards

How to Avoid Crashing the Credit Score

Repeatedly maxed-out credit cards can crash the borrower’s creditworthiness and their eligibility to qualify for low interest rates.

Some borrowers make multiple payments throughout the month to avoid maxing out their credit cards. In order to avoid negatively affecting a high credit score, borrowers should make sure to set a personal alarm when their outstanding balance has reached 75% of the credit limit, as a signal to stop using the credit card until the balance is cleared.

Improve Creditworthiness After Nearing Bankruptcy

Nearing bankruptcy is considered to be a close call to what could have been a negative record on a borrower’s credit report and would affect the personal credit score for years.

One of the best ways to improve the credit score after nearing bankruptcy is to keep only one credit card with a small credit limit and make sure to pay off the balance in full by the due date. Over time, this responsible habit of borrowing and paying in full will improve the borrower’s credit score.

Financing Options for Borrowers With A Maxed-Out Credit Card Debt

The process of obtaining financing for borrowers with a history of maxed-out credit cards is much simpler done with a private lender than the process imposed by traditional lenders. Although private lenders will still ask to verify some information to satisfy their internal lending guidelines, in general, it may actually be faster and easier.

Private lenders assess a mortgage loan application based on the property value and its location in the neighbourhood. A property appraisal is certainly a requirement that borrowers will need to satisfy as part of the refinancing process.

Also, generally speaking, private lenders will allow higher loan-to-value (LTV) than traditional banks and lenders.

Quicker Funding

Private lenders are an ideal option since they are not tied to the same lending guidelines as traditional lenders which is limiting. Unlike bank loans, private lenders focus more on the value of the property and the borrower’s exit strategy to determine the terms of the loan. This means that they will not make any preconditions on the borrower’s credit score or debt to income ratio.

A big advantage of hard money lending is that you can beat traditional lenders’ interest rates and timeframes. While traditional banks are known for their long loan terms, hard money loans can close in just days or weeks. This is important in time-sensitive situations, such as paying off accruing personal debt from maxed-out credit cards. Getting a mortgage loan approved faster helps you resolve your personal situation faster and avoid delays.

Origination Fee

Origination fee can also be referred to as “commitment fee”, or any other name. It usually refers to the underwriting or processing fee. This fee can cover a variety of expenses, from processing the loan to underwriting the loan. The amount of this fee depends on the lender and the type of mortgage loan. It is always stipulated in writing so there is no bad surprise to the borrowers on the closing day. If you are not sure how much you are paying for your origination fee, it is a sign that you are not working with an ethical private lender. Be aware and find other private lenders who are transparent with their origination fees.

At Canadian Private Mortgage, we disclose our commitment fee clearly in writing from the beginning of the process.

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What Our Clients Say

Andrea Chase - Hamilton, ON

Andrea Chase, Hamilton, ON

I had 2 yrs left on my consumer proposal, with the 2nd mortgage offer by Matrix Mortgage Global I was able to pay off the proposal and re-establish my credit

Steve Darcy - Surrey, BC

Steve Darcy - Surrey, BC

I own a historic mixed use commercial/residential building that I wanted to modernize. Matrix Mortgage Global provided me with a term loan to complete the renovations

Blake Taylor - Banff, AB

Blake Taylor - Banff, AB

I own a family bed and breakfast just outside Banff and ran into some tax arrears. Our bank turned us down for a commercial loan. Matrix Mortgage Global provided us with a 2nd mortgage which we used to pay off the tax arrears.

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