Canadians depend on mortgage financing to bridge the gap between their available down payment and purchase price.
Since conventional mortgage lenders have stricter guidelines such as the Mortgage Stress Test, getting a mortgage loan today can be challenging, which is why your credit score is more important than ever. So, you may wonder what credit score you need to get a mortgage or the "minimum credit score required"… First, it's important to realize mortgage lenders look at multiple factors when approving a mortgage application. Although your credit score is a big (and determining) factor, it’s NOT the only factor. Income, your tenure/length of employment, monthly liabilities, detailed credit history and size of down payment are also important. But, nonetheless, if you want to get the absolute best interest rate, your credit score needs to be acceptable. So, what’s a good score? In Canada, a person’s credit score can range from 300 to 900. Prime lenders (also known as “A” lenders) consider a credit score over 630 to be a good credit score, but as previously mentioned, mortgage lenders also consider other factors. For example, if your credit score is 630, which is on the lowest end of "good credit", and you have noted delinquencies/missed payments and loans referred to a collection agency and also have a very minimal down payment, your application will likely get declined. But, if your credit score is 630, and you have great repayment history and a sizeable down payment, a prime lender may feel more inclined to approve your application despite your score being on the lower end. A credit score of 680 and above is excellent credit. Working with someone like myself can increase your chances of getting approved because I know exactly what lenders are looking for thus I can help structure your application properly so a lender can look upon it more favourably. Here are some other factors to consider when applying for a mortgage:
How can you improve your credit score? There are a couple of actions you can take immediately to improve your credit score and avoid having to apply with a lender offering higher interest rates. First, make sure you make your payments on time. Second, always keep your balances at least 20% below your credit limit. Keeping your loans above the credit limit can actually work against you, causing your score to plummet. Do you have any questions about your credit? Please call or write. Sarah A. Colucci Mortgage Agent Lic. M14000929 Mortgage Edge, Broker 10680 Direct: (647) 773-4849 Email: sarah.colucci@mortgageedge.ca
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If you require a mortgage loan, know there are a few different routes you can take to get the best interest rate and terms. It’s important you exercise all your options and do your own research when you apply for a mortgage. Also remember to choose to work with someone reputable by checking their reviews (that goes for banks too).
In Canada, there are multiple lenders all competing for mortgage business, but not all lenders service the same type of borrower and property. For example, some lenders only work with borrowers who have good credit and standard income, such as individuals on a salary. Other lenders choose to work with borrowers in unique income situations or individuals that don’t meet conventional lending guidelines. Reputable mortgage brokers work with many lenders that service many borrowers and property-types. The benefit of working with a mortgage broker includes ensuring that you exercise all your options and ultimately get the best financing. Mortgage brokers also work to save you money by advising on the importance of prepayment privileges, penalties, rates and hidden terms. By advising you correctly, a mortgage broker can save you money both in the short and long term. For example, choosing a lender that charges fewer fees or has an optimal prepayment calculation method can save thousands of dollars should you exit your mortgage contract earlier than expected. Mortgage brokers also have an optimal application process too and usually have quicker turnaround times than conventional banks. We also offer the ability to sign and meet virtually, which can save you time. So, which lenders and financial institutions do mortgage brokers work with? Our brokerage works with major banks and credit unions. We also work with a variety of monoline and boutique lenders that offer very competitive pricing. We are constantly forming new and strong partnerships with various financial institutions to ensure we can service every borrower-type and offer really great mortgage products. Whatever your financial decisions, it is very important you do your homework and work with a reputable mortgage professional. Start your application today. Apply now. Sarah A. Colucci Mortgage Agent Lic. M14000929 Mortgage Edge, Broker 10680 Direct: (647) 773-4849 Email: sarah.colucci@mortgageedge.ca |
By: Sarah ColucciSenior Mortgage Agent, Lic. M14000929 Categories |