You have heard it always- if you have bad credit, you cannot get approved for a mortgage. You can find a lot of misinformation about buying a home; let us clear up this popular mortgage myth. A credit score is an essential metric that determines your eligibility to get approved for any financial loans.
A credit score is a three-digit number, typically between 300 and 900, determined by the credit bureaus. It represents your credit risk and management of credit. Equifax and TransUnion are the main credit bureaus that collect information from creditors about your financial experiences in Canada. What is a credit report? A credit report is a consumer’s financial report card encompassing a summary of your credit usage.
The higher your credit score, the better because a high credit score helps you qualify for the lowest possible mortgage rates. According to credit score statistics conducted by Simple Rates, 56% of Canadians have never checked their credit scores. A credit score anywhere between 620 and 680 would be considered a minimum when securing a mortgage.
A lower credit score doesn’t necessarily mean that you won’t qualify for a mortgage. However, it may cost you extra money in the long run. A lower credit score not uncommon among home buyers and mortgage brokers can help you evaluate your affordability. You can also ask someone to a co-signer on the mortgage and take advantage of their good credit score for your application. You can also opt for a first and second mortgage; the combined average could be around three percent.
Dominion Lending Centres NasaKasa
While it’s possible to get a mortgage with bad credit, you can avoid paying a higher interest rate and higher mortgage payments with proper preparation for your application. At Dominion Lending Centres NasaKasa, we can help you create a plan to improve your score before you start house hunting and gain access to more lenders and lower interest rates. You can reach us at 905.997.7001 or email us at email@example.com to check if you will be eligible for the program.