Borrowers with a poor credit rating have less mortgage loan options

Borrowers with a poor credit rating have less mortgage loan options

You want to get a mortgage loan, but you have a poor credit rating. What happens when a company like Home Trust, which juggles this type of credit request on a daily basis, also experiences liquidity problems? The company founders, relinquishing a part of the market to private lenders, thereby making it easier for you to get a loan.

What is Home Trust?

Home Trust is a trust corporation that focuses on borrowers that do not meet all the lending criteria of traditional financial institutions. The company targets borrowers with a poor credit rating, a fluctuating income, and financial difficulties. A few years ago, Home Trust was one of the biggest players in its field. They were making life difficult for private lenders by offering competitive interest rates.

However, the corporation recently experienced numerous complications within their organization. First, competitors arrived on the scene and made their presence felt, making life difficult for Home Trust. Take for example Equitable Bank, currently the ninth largest independent Canadian bank.

Then, in 2015, Home Trust faced accusations of fraud, when mortgage brokers provided fake documents when underwriting loans. The result? Huge numbers of investors went elsewhere, and there was a loss of more than 600 million in market cap.

It seems as though there had also been issues at the administrative level for some time. Regardless, their share values continue to drop, and several managers have left the organization.

Market impact

Home Trust is in a downslide and their capital costs have significantly increased. We can expect that it will tighten its finance criteria as a safeguard. Since its clientele consists mostly of people experiencing financial difficulties, we can predict that its revenue will continue to drop in the short and medium term.

This gives private lenders the opportunity to stand out from their competitors by offering Home Trust’s target clientele benefits that they no longer have access to. As explained in my article Why get a private mortgage instead of a conventional mortgage?, private lenders like Victoria Financial offer financing to people with a poor credit rating, at competitive rates.

There are numerous benefits to taking out a mortgage loan with a private lender, because a loan application request will be accepted, even if you have:

  • A fluctuating income.
  • A poor credit rating.
  • Unpaid taxes.
  • A prior bankruptcy.

Regardless as to your reasons for choosing a mortgage loan, save precious time by going with a company that will readily accept your application.

After reading about the numerous benefits of taking out a loan with a private lender, choose the most viable and effective solution!

Contact me via email maxime.st-laurent@financierevictoria.com or by phone at 1 (877) 220‑7738, ext. 101. Even though you are facing financial difficulties or not, we can help you.