How to Get a Home Repair Loan with Bad Credit

Your home equity is one of the most powerful financial tools you have as a homeowner, yet it’s often overlooked. If you’re trying to fund a home repair and are worried about your credit, your equity is the key. It represents the portion of your home you truly own, and it can serve as the foundation for securing the funds you need. For many lenders in Ontario, significant home equity can outweigh a challenging credit history. This guide focuses on that powerful asset, explaining how to get a home repair loan with bad credit by tapping into your home’s value. We’ll cover everything from home equity loans to refinancing, showing you how to make your property work for you.

Key Takeaways

• Focus on Your Home's Value, Not Just Your Credit Score: Your home equity is often the most important factor for lenders who offer flexible financing. A lower credit score doesn't close the door when you have significant equity to secure a loan for your repairs.
• Explore All Your Lending Avenues: Don't limit your search to your primary bank. Alternative lenders, credit unions, and mortgage brokerages specialize in finding solutions for homeowners with varied financial profiles, giving you access to a wider range of loan options.
• Strengthen Your Application for Better Terms: A little preparation goes a long way. By organizing your financial documents, reducing other debts, and comparing offers through pre-qualification, you present yourself as a responsible borrower and can secure more favourable loan conditions.

Can You Get a Home Repair Loan with Bad Credit?

Yes, you absolutely can. If your home needs repairs and your credit score isn't where you'd like it to be, don't count yourself out. While a lower credit score can make the process feel more challenging, it doesn’t close the door on financing. For homeowners in Ontario, there are several paths you can explore to get the funds you need for everything from a leaky roof to a full kitchen remodel.

The key is understanding what "bad credit" really means to lenders and knowing which options are available to you. Lenders look at more than just your credit score; they also consider your income, your home's value, and the amount of equity you've built. By focusing on your strengths as a homeowner, you can find a loan that fits your situation and helps you move forward with your repair projects.

What "Bad Credit" Means in Canada

In Canada, your credit score is a three-digit number that helps lenders assess your financial health. The two main credit bureaus, Equifax and TransUnion, calculate this score, which typically ranges from 300 to 900. While there’s no official "bad credit" score, a score below 660 is often considered fair or poor by many traditional lenders.

It’s important to remember that this is just a guideline. Different lenders have different standards. Some may have a strict minimum score, while others are more flexible, especially if you have significant home equity or a stable income. Understanding your own credit report and score is the first step in figuring out which lenders and loan products are the right fit for you.

How Your Credit Score Impacts Loan Approval

Your credit score is one of the main factors lenders use to gauge risk. A lower score can suggest a history of missed payments or high debt, making lenders cautious. As a result, you might be offered higher interest rates or less favourable terms compared to someone with a higher score. This is how lenders balance the risk they’re taking on.

However, for homeowners, your credit score is only part of the story. The equity in your home is a powerful asset that can make you a much stronger applicant. Because a home equity loan is secured by your property, some lenders are willing to place more weight on your home's value and less on your credit history. This opens up more opportunities for homeowners who don't fit the traditional lending mould.

Busting Common Myths About Bad Credit Loans

Navigating loans with less-than-perfect credit can be confusing, and there are a lot of myths out there. Let’s clear a few things up. First, the idea that you can't get a loan at all is simply not true. Homeowners have options. Second, be wary of any service promising "free money" for home repairs—these are often scams. While there are legitimate government rebates and programs, they aren't handouts.

Finally, some people worry that taking on a loan with bad credit will only make things worse. In reality, if you manage the payments responsibly, it can be a positive step. Using a loan to consolidate high-interest debts or make value-adding home repairs can improve your overall financial picture and even help you rebuild your credit over time.

Explore Your Loan Options for Home Repairs

When a necessary home repair pops up, figuring out how to pay for it can be stressful, especially if your credit score isn’t where you’d like it to be. The good news is that traditional bank loans aren’t your only choice. Several financing paths are available to homeowners in Ontario, each with its own structure and qualification criteria. Your best option will depend on the cost of your repairs, how much equity you have in your home, and your overall financial situation.

Understanding these different avenues is the first step toward making a confident decision. You can use the value you’ve built in your home, look into personal loans for smaller projects, or explore government programs that might cover some of your costs. For those who don’t fit the strict mould of traditional lenders, alternative and private lenders offer another viable route. Let’s walk through what each of these options looks like so you can find the right fit for your repair project.

Tap Into Your Home's Equity

If you’ve been paying your mortgage for a while or your property value has increased, you likely have home equity you can use. A home equity loan or a home equity line of credit (HELOC) lets you borrow against that value. These are secured loans, meaning your home acts as collateral. Because this reduces the lender’s risk, they can often be more flexible with credit score requirements than they would be for an unsecured loan. You can typically access this equity through a mortgage refinance or by taking out a second mortgage.

Consider a Personal Loan

A personal loan is another way to fund home repairs, particularly smaller ones. Most personal loans are unsecured, which means you don’t need to use an asset like your home as collateral. However, because there’s no collateral, lenders rely heavily on your credit score and income to approve the application. If you have bad credit, you may find it harder to qualify for an unsecured loan, or you may be offered a much higher interest rate. It’s an option worth exploring, but be sure to compare the costs of borrowing with other financing types.

Look into Government Renovation Programs

Before you borrow, it’s worth checking if you qualify for any government assistance. While not direct "bad credit loans," these programs can provide grants or loans that reduce the total amount you need to finance. For example, the Canada Greener Homes Initiative offers grants and interest-free loans for energy-efficient upgrades like new windows or heat pumps. Some municipalities in Ontario also offer programs for essential home repairs, especially for seniors or homeowners with disabilities, so be sure to check your local city’s website for information.

Discover Alternative and Private Lenders

If you’ve been turned down by a traditional bank, don’t get discouraged. Ontario has a diverse lending landscape that includes alternative lenders (like credit unions and trust companies) and private lenders. These lenders often have more flexible criteria and are willing to look at the bigger picture beyond just your credit score. They may place more importance on your home’s equity and overall value. While their interest rates might be higher than a bank’s, they provide an essential source of funding for homeowners who need more accessible financing options.

How to Qualify for a Home Repair Loan with Bad Credit

When you apply for financing, lenders look at more than just one number. They assess your overall financial health to understand your ability to repay a loan. While every lender has slightly different criteria, they generally focus on four key areas: your credit, your income, your home’s equity, and your existing debt. Understanding what they’re looking for can help you prepare your application and find the right financing solution for your home repairs, even if your credit isn’t perfect. Let’s break down what you’ll need to qualify.

Your Credit Score

Your credit score is a snapshot of your financial habits, but it doesn’t tell the whole story. While traditional lenders often prefer scores of 660 or higher, a lower score doesn’t automatically disqualify you. Many lenders in Ontario specialize in helping homeowners with less-than-perfect credit. Instead of focusing solely on the score, they may look at your broader credit history to see if you’ve been making consistent payments recently. A "home repair loan" isn't a specific product, so the credit requirements will depend on whether you're seeking a personal loan or a home equity loan. Using your home’s equity can often make your credit score a less critical factor in the approval process.

Your Income and Job History

Lenders need to see that you have a reliable source of income to cover your new loan payments. A stable job with a consistent salary is the simplest to verify, but don’t worry if that’s not your situation. Many Ontarians are self-employed, work on contract, or have variable income. While traditional banks can sometimes struggle with this, mortgage brokerages and alternative lenders are experienced in working with different income types. They’ll typically ask for documents like tax returns (Notices of Assessment), business bank statements, or contracts to verify your earnings. The main goal is to demonstrate that you have a steady cash flow and can comfortably manage the loan.

Your Home's Equity and Value

Your home equity is one of your most powerful financial tools, especially if you have bad credit. Equity is the difference between your home’s current market value and the amount you still owe on your mortgage. When you use your home to secure a loan, you’re offering it as collateral, which reduces the lender’s risk. This often leads to better interest rates and makes it easier to get approved, as the decision is based more on your property’s value than your credit score. In Canada, you can typically borrow up to 80% of your home’s appraised value, minus your remaining mortgage balance. A home equity loan can be an excellent way to fund major repairs.

Your Debt-to-Income Ratio

Your debt-to-income ratio, often called a Total Debt Service (TDS) ratio in Canada, helps lenders gauge your ability to handle new debt. It’s calculated by dividing all your monthly debt payments (including your mortgage, car loans, and credit card payments) by your gross monthly income. Most traditional lenders look for a TDS ratio of 44% or less. However, if you have significant home equity, some alternative and private lenders are more flexible. They understand that your financial picture is unique and may approve higher ratios. Reducing your other debts before applying can help lower this ratio and strengthen your application.

Where to Find Bad Credit Home Repair Loans in Ontario

When your credit isn't perfect, finding a loan for home repairs can feel like a challenge. The good news is that traditional banks aren't your only option. In Ontario, several avenues are available for homeowners who need financing, regardless of their credit history. Knowing where to look is the first step toward securing the funds you need to fix up your space. From specialized lenders to local credit unions, here are some of the best places to start your search.

Work with a Mortgage Brokerage

A mortgage brokerage can be an invaluable partner, especially when you have less-than-perfect credit. Instead of working for one specific lender, a brokerage partners with a wide network of them, including traditional, alternative, and private lenders. This gives you access to many different loan options through a single point of contact. A licensed mortgage expert can assess your unique financial situation and match you with lenders who are more likely to approve your application. They do the heavy lifting of shopping around for you, saving you time and the potential credit impact of applying to multiple places on your own. This approach helps you find a flexible home loan that fits your specific needs and circumstances.

Explore Alternative and Private Lenders

Beyond the big banks, a whole world of alternative and private lenders exists. These lenders often specialize in helping homeowners who don't fit the standard lending mould, perhaps due to their credit score or type of income. While traditional lenders rely heavily on credit scores, alternative lenders may place more weight on the amount of equity you have in your home. This equity-focused approach can open doors for many homeowners. It’s important to know that interest rates from these lenders may be higher than those from a bank, but they provide a vital financing route when other options aren't available. The Financial Services Regulatory Authority of Ontario (FSRA) provides more information on the different types of lenders in the province.

Check with Credit Unions

Credit unions are another excellent place to look for a home repair loan. As member-owned, not-for-profit financial institutions, they often prioritize community service over profits. This can translate into a more personal approach to lending. A credit union might be more willing to look at your entire financial picture rather than just your credit score. They sometimes offer competitive interest rates and flexible terms. If you’re already a member of a credit union, that’s a great place to start. If not, you can look for one in your local community. The Canadian Credit Union Association has a locator tool to help you find one near you.

Research Online Lenders

The digital landscape has introduced a variety of online lenders that offer personal loans and other financing products. These companies often provide a quick and convenient application process that you can complete from home. Many online platforms allow you to pre-qualify, which lets you see potential interest rates and terms without affecting your credit score. This makes it easy to compare your options. When exploring online lenders, it’s crucial to do your homework. Stick to reputable companies with positive reviews and transparent terms. The Financial Consumer Agency of Canada offers helpful guidance on what to look for when considering a personal loan for your home repairs.

Improve Your Chances of Getting Approved

When you’re ready to apply for a home repair loan, taking a few proactive steps can make a big difference. Even if your credit isn’t perfect, preparing your finances shows lenders you’re a responsible borrower. Think of it as setting yourself up for success. By tidying up your financial profile, you can strengthen your application and access more options.

Strengthen Your Credit Profile First

Before you apply, it’s a great idea to focus on your credit. A higher credit score often leads to better interest rates and more favourable terms. Start by getting a free copy of your credit report from both Equifax and TransUnion Canada to check for any errors. If you find mistakes, dispute them right away.

From there, concentrate on the basics: make all your payments on time and try to pay down the balances on your credit cards. Keeping your credit utilization low (the amount you owe compared to your credit limit) is a key factor. It’s also wise to hold off on applying for any new credit cards or loans in the months leading up to your home repair loan application.

Lower Your Debt-to-Income Ratio

Lenders in Canada pay close attention to your debt service ratios. Your Total Debt Service (TDS) ratio is the percentage of your gross monthly income that goes toward paying all your debts, including your mortgage, property taxes, and other loans. Lenders want to see that you can comfortably handle a new loan payment on top of your existing obligations.

To improve your TDS ratio, you can either reduce your debt or increase your income. Focus on paying down high-interest debts like credit card balances or personal loans. If you’re expecting a raise or have a side business, make sure that income is well-documented. Avoid taking on new debt, like financing a car, until after your home repair loan is secured.

Get Your Financial Documents in Order

Having your paperwork ready will make the application process much smoother and faster. Lenders need to verify your identity, income, and existing debts. Taking the time to gather everything in one place shows you’re organized and serious about your application.

Typically, you’ll need:

• Government-issued photo ID
• Proof of income, such as recent pay stubs, T4 slips, or your Notice of Assessment from the CRA
• If you’re self-employed, have your business registration and financial statements for the last two years ready
• Recent property tax bills
• Statements for your current mortgage and any other loans or credit lines

Find a Co-Signer or Guarantor

If you’re concerned about your credit or income, bringing a co-signer or guarantor on board can significantly strengthen your application. This is usually a trusted family member or friend with a strong credit history and stable income who agrees to be legally responsible for the loan if you’re unable to make payments.

For a lender, a co-signer reduces risk, making them more likely to approve the loan. It’s a major commitment for the person co-signing, as the loan will appear on their credit report and they are equally liable for the debt. Make sure you both have an open conversation and fully understand the responsibilities before moving forward with this option.

Prequalify to Compare Your Options

Before you commit to a lender, it’s smart to see what you might qualify for. Prequalification is a simple, no-obligation step that gives you an estimate of the loan amount and interest rate you could receive. Best of all, it’s usually done with a "soft" credit check, which doesn’t impact your credit score. Always confirm with the lender whether they’ll use a soft or hard inquiry If you are not sure.

This allows you to compare different options without any pressure. Working with a mortgage brokerage is a great way to do this, as they can check with multiple lenders on your behalf. When you’re ready, you can get started in minutes to see what kind of financing might be available for your home repairs.

What to Expect from a Bad Credit Loan

Securing a loan when your credit isn't perfect is entirely possible, but it helps to know what to expect. The terms for a bad credit home repair loan are often different from what traditional lenders might offer. Lenders that specialize in these situations look at your application more holistically, considering factors like your home's equity and your overall financial picture, not just your credit score.

Understanding the key components of a loan offer—like the interest rate, loan amount, and any associated fees—is the best way to make an informed decision. While the numbers might look different, the right loan can still be a powerful tool for managing repairs, consolidating debt, or reaching your financial goals. Let’s walk through what a typical offer might include so you can feel confident when comparing your options.

Interest Rates

One of the first things you’ll notice is that the interest rate on a bad credit loan is usually higher than on a loan for someone with excellent credit. Lenders see a lower credit score as a sign of higher risk, and the interest rate reflects that. Think of it as the cost of borrowing money; when the risk is higher for the lender, the cost tends to be higher for the borrower.

However, it’s important to put this rate into perspective. While it may be higher than a standard mortgage rate, it’s often significantly lower than the rates on high-interest credit cards or unsecured personal loans. The Financial Consumer Agency of Canada provides great resources on how your credit score impacts borrowing. By using a home repair loan to pay off credit card debt, for example, you could still save a substantial amount in interest charges each month.

Loan Amounts and Repayment Terms

The amount you can borrow for a home repair loan is primarily based on your home’s equity—the difference between your home's current market value and what you still owe on your mortgage. In Canada, you can typically borrow up to 80% of your home’s appraised value, minus your remaining mortgage balance. So, if your home is worth $800,000 and you owe $400,000, you could potentially access up to $240,000 in equity.

The repayment term, or amortization, is how long you have to pay back the loan. Terms can range from a few years to much longer. A shorter term means higher monthly payments but less interest paid overall. A longer term gives you smaller, more manageable payments, which can be helpful for your monthly budget. It’s all about finding the right balance for your financial situation.

Fees and Closing Costs

Just like with a regular mortgage, a home repair loan comes with some upfront costs. These are often called closing costs and are typically deducted from the loan amount, so you don’t need to pay for them out of pocket. It’s important to ask for a complete breakdown of these fees so there are no surprises.

Common costs include an appraisal fee to determine your home’s current value, legal fees for your lawyer to handle the paperwork, and potentially a brokerage fee. A good loan expert will walk you through every single cost before you commit to anything. Understanding these one-time mortgage costs is a key step in budgeting for your loan and ensuring the financing fits your needs.

Find Other Ways to Fund Your Repairs

If a traditional loan doesn’t feel like the right fit for your situation, don’t worry. There are several other avenues you can explore to get the cash you need for essential home repairs. From government assistance to creative arrangements with contractors, thinking outside the box can help you find a solution that works for your budget and your home. These alternatives can be especially helpful if you need to address urgent issues but want to avoid taking on new debt or need a different kind of financial flexibility. It’s always a good idea to look at all your options before making a decision.

Apply for Ontario Grants and Rebates

Depending on your income and the nature of the repairs, you might qualify for financial assistance from the government. The Ontario Renovates Program, for example, offers forgivable loans to low-income seniors and individuals with disabilities to help with home modifications that improve accessibility and safety. Many municipalities also have their own local programs for urgent repairs. These programs are designed to help homeowners maintain safe living conditions and often don't require repayment until you sell your home, making them a fantastic resource if you qualify.

Ask About Contractor Financing

Some larger home improvement companies and contractors offer their own financing plans. This can be a convenient way to manage the cost of a big project, allowing you to pay for the repairs in installments over time. While it simplifies the process by keeping the work and the financing in one place, it’s important to treat it like any other loan. Be sure to ask about the interest rate, repayment terms, and any administrative fees. Always compare their offer with other financing options to make sure you’re getting a competitive deal.

Explore Home Equity Sharing Agreements

A less common but interesting option is a home equity sharing agreement. This isn't a loan. Instead, a company gives you a lump sum of cash today in exchange for a share of your home's future increase in value. When you sell your home down the road, the company gets its initial investment back plus a percentage of the appreciation. This can be a way to access funds without taking on monthly debt payments, which is helpful for homeowners with fluctuating incomes. However, it means you’ll be giving up a portion of your future equity gains.

Use Your Existing Credit Wisely

For smaller, more manageable repairs, using your existing credit can be a practical solution. A low-interest line of credit or even a credit card can cover the cost, provided you have a solid plan to pay it off quickly to avoid high interest charges. You can also save a significant amount of money by doing some of the work yourself. Tackling tasks like painting, minor drywall repair, or landscaping can cut down on labour costs, leaving you with only the material expenses to cover. This approach helps you manage your credit responsibly while getting the job done.

Your Step-by-Step Guide to Applying

Once you’ve explored your options and feel ready to move forward, the application process is more straightforward than you might think. Breaking it down into a few key steps can make it feel much more manageable. Here’s a simple guide to what you can expect when you apply for a home repair loan.

Gather Your Documents

Before you apply, it helps to get your paperwork in order. Start by figuring out exactly how much you need for your repairs so you only borrow what’s necessary. Lenders will need to verify your identity, income, and property details. While the exact list can vary, it’s a good idea to have these items ready:

• Proof of Identity: A government-issued photo ID like a driver’s licence or passport.
• Proof of Income: Recent pay stubs, T4 slips, or your Notice of Assessment from the CRA. If you’re self-employed, have your business registration and financial statements handy.
• Property Information: Your latest property tax bill and details of your current mortgage.
• Financial Overview: A list of your assets and any debts you hold.

Understand the Application Process and Timeline

The first step is usually filling out a simple, secure online form. When you work with a mortgage brokerage, you only need to complete one application. From there, a licensed expert will review your information and connect with you to discuss your goals. They’ll then look for suitable loan options from a network of different lenders on your behalf. While some unsecured loans can be funded quickly, a home equity loan involves a few more steps, like a property appraisal and legal paperwork. A realistic timeline from approval to receiving your funds is typically a few weeks. You can get started in minutes to see what your options might be.

Know What to Expect During Approval

Lenders look at several factors to make a decision. While a strong credit score is always helpful, lenders who specialize in equity-based financing focus more on the bigger picture. They’ll consider the amount of equity you have in your home, your property’s value and location, and your ability to make payments. Your income and employment history help show that you have a stable financial footing. Even if your credit score isn't perfect, having significant home equity can open up more possibilities for approval. The lender’s goal is to understand your complete financial situation, not just one number.

Avoid These Common Bad Credit Loan Mistakes

When you need funds for an urgent home repair, it’s easy to feel rushed into a decision. But taking a moment to be strategic can save you a lot of money and stress down the road. Looking for a loan with a less-than-perfect credit history requires a bit of extra care. By being aware of the common pitfalls, you can approach your search with confidence and find a solution that truly works for your financial situation. Here are a few key mistakes to avoid as you look for the right home repair loan.

Watch Out for Predatory Lenders

It’s true that some lenders specialize in helping homeowners with bruised credit, but it’s important to distinguish them from predatory lenders. A predatory lender might use aggressive tactics, promise guaranteed approval, or hide fees in the fine print. Be cautious of anyone who pressures you to sign immediately or isn’t transparent about the total cost of the loan. Always work with a licensed professional or brokerage. A trustworthy expert will take the time to explain your options clearly and ensure you understand the terms before you commit to anything, helping you find a safe and suitable path forward.

Don't Apply Everywhere at Once

While it’s smart to shop around, submitting formal loan applications to multiple lenders at the same time can backfire. Each formal application typically results in a "hard inquiry" on your credit report, and too many hard inquiries in a short period can lower your credit score. Instead, start by getting pre-qualified with different lenders. Prequalification usually involves a "soft inquiry," which doesn’t impact your score but gives you a good idea of the rates and terms you might be offered. This allows you to compare potential offers without hurting the credit profile you’re working to build.

Look Beyond the Monthly Payment

A low monthly payment can be tempting, but it doesn’t tell the whole story. A lender might offer a lower payment by stretching the loan over a much longer repayment period, or term. While this can make the loan seem more affordable month-to-month, you could end up paying thousands more in interest over the life of the loan. When comparing offers, look at the Annual Percentage Rate (APR), the loan term, and the total interest you’ll pay. A slightly higher monthly payment on a shorter-term loan could save you a significant amount of money in the long run.

Remember to Compare Your Options

When you have a lower credit score, it can feel like your options are limited, but that’s rarely the case. Not all lenders use the same criteria, and some are more flexible than others, especially when you have significant home equity. It’s essential to compare different loan types and lenders to find the best fit. Working with a mortgage brokerage can simplify this process. Instead of you applying to multiple places, a broker can access a network of different lenders—including those who specialize in equity-based financing—to find competitive options tailored to your situation. You can see what you might qualify for in just a few minutes.

Ready to Fund Your Home Repairs?

Finding the money for essential home repairs can feel like a major hurdle, especially when you're worried about your credit score. But don't let that stop you from creating a safer and more comfortable home. You have more options than you might think, and with the right approach, you can secure the financing you need to get started on your project. The key is to understand your choices and find the one that best fits your financial situation.

For many Ontario homeowners, the most powerful tool is the equity you've already built in your property. A home equity loan or mortgage refinance can provide the funds you need, often at a lower interest rate than unsecured loans. It's also worth looking into government programs that can help offset costs. For instance, the Canada Greener Homes Grant offers financial assistance for energy-efficient upgrades, which could cover some of your planned renovations.

Every homeowner's situation is unique, so the best path for your neighbour might not be the right one for you. This is where getting personalized advice makes all the difference. Instead of navigating the world of lenders on your own, working with a mortgage brokerage can give you a clear advantage. A licensed expert can review your finances, explain your options in plain language, and connect you with lenders—including those who specialize in helping homeowners with less-than-perfect credit.

At Lotly, our team is dedicated to finding flexible solutions that work for real life. We look at your full financial picture, not just your credit score, to help you access your home's equity. If you're ready to move forward with your home repairs, you can get started in minutes to see what you may qualify for. Understanding your options is the first step toward turning your repair list into a completed project.

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Frequently Asked Questions

Will taking out another loan make my credit score worse? This is a common concern, but the answer is usually no—as long as you manage it responsibly. When you first take out a loan, your score might dip slightly because of the new debt and the credit inquiry. However, making your payments on time, every time, demonstrates positive financial behaviour. Over the long run, this consistent payment history can actually help you rebuild and improve your credit score.

How much money can I actually borrow for my home repairs? The amount you can borrow is mostly tied to your home's equity, which is your property's current value minus what you still owe on your mortgage. In Ontario, you can generally access up to 80% of your home's appraised value. Lenders will calculate this maximum amount and then subtract your remaining mortgage balance to determine how much new financing you're eligible for.

My repair is urgent. How long does it take to get the funds? The timeline depends on the type of loan you choose. An unsecured personal loan can sometimes be funded in a matter of days. A home equity loan takes a bit longer because it involves more steps, like a property appraisal and legal paperwork to register the loan against your home. A realistic timeframe for receiving funds from a home equity loan is typically a few weeks from final approval.

I'm self-employed. Will that make it harder to get approved? Not at all. Being self-employed is very common, and many lenders and mortgage brokerages are experienced in working with non-traditional income. Instead of pay stubs, you'll likely be asked to provide documents like your last two years of tax returns or Notices of Assessment to show your income history. As long as you can demonstrate a stable and sufficient income, being your own boss won't stand in your way.

What's the main difference between using my home's equity versus getting a personal loan? The key difference is that a home equity loan is "secured" by your property, while most personal loans are "unsecured." Because a secured loan has your home as collateral, it reduces the lender's risk. This often makes it easier to get approved for a larger amount with a lower interest rate, even with bad credit. An unsecured personal loan relies almost entirely on your credit score and income, which can make it harder to qualify for or result in much higher interest rates.