QUALIFYING FOR A MORTGAGE
While house hunting, sometimes, you stumble upon the house that seems perfect for you and your family. However, when you apply for a mortgage for the house, you find that you have fallen short- your credit score is not quite up to the mark. In this situation, you usually give up on the house of your dreams, and settle for something which is more suited to your credit score.
In order to prevent such a misstep from taking place with you, here are a few things to keep in mind, so that you do not have to compromise with your credit score.
In Canada, you can usually get a loan of your choice with a credit score like 680. However, depending on the bank or the lender that you choose, you can get loans for as low as 620 as well. You also can get a loan with bad credit.
Furthermore, there are ratios which determine how much of your income can actually go towards repaying your mortgage. Depending on if you are a businessman, a salaried person, or self-employed, your interest rates can vary greatly. However, even with these separate rate, in order to ensure the best interest rates for yourself, you should keep your credit score at above 680 in the least.
Lenders want to know about your income, so that they can be assured you will not default on your payments. Having an exemplary credit score means that at an average, only 39% of your income will go towards repaying your mortgage. The lower your credit score, the higher this rate increases. If you don’t know what is your credit score, you can order it on Equifax.