What is the required credit score for first mortgage
The Credit Challenge
For most people, credit score isn’t something that is of utmost importance. They pay their bills on time and just get by with whatever is convenient for them. If you are someone who gets paid well then you can sometimes get away with this “fast and easy going” lifestyle. But, in situations when your income isn’t enough to pay off all your existing debts, then it can feel like a sinking ship.
This is especially true if you’re a first-time home buyer and may have some credit problems that could make applying for a loan difficult. However, there are things you can do to increase your chances of being approved by a lender quickly and easily.
Reason for having good credit score for first mortgage
The reason your credit score is so important is because it tells lenders what kind of track record you have with regards to repaying debts and makes them feel confident doing business with you by providing information about the type of person you are based on factors such as, how long you’ve had credit, your ability to pay back that credit and how much you currently owe. It’s affected by how much debt you’re carrying in relation to limits, how many cards or tradelines you have a history of repayment.
If you are considering getting your first mortgage, keep in mind that a credit score above 680 puts you in a good position to get financing, while a score below that will make it tough and improvement is needed.
What makes up your credit score?
If you want to keep your credit score in good form, it is important to take a good look at your credit report and check over your credit score regularly. If there are any issues with it, such as incorrect information or records that are not supposed to be on the report, contact Equifax and ask them to have the discrepancies removed once they have been identified. Another big factor when deciding on a credit rating is how often you make payments on time and how much you owe in monthly instalments.
CONSIDER THE 2-2-2 RULE
If you’re a young person new to the world of credit, consider following the 2-2-2 rule. Two forms of a revolving credit history, like two credit cards with a credit limit of at least $2,000 and no bad payments for at least 24 months.
It is very important to note that a good credit score is more than just keeping your balances low. A good credit score means knowing that you are handling your cards responsibly on a daily basis and that you aren’t going over 30% of total the credit limit for any given card at any time. It is recommended to check if your card has an annual fee and make sure it is paid on a timely basis too.
It’s not wise to just lock away your credit cards. You need to make sure that you are using them wisely especially because those are the cards that will be most likely used to determine if you qualify for a loan. With the right use of your credit cards and having a positive history on it, banks and lenders would show interest in you and might give you an approval easier than anticipated!
For more information consult with our team of professionals. Book your consultation now
Rock bottom credit
When things don’t seem to be going your way, it can sometimes seem as if there’s really nothing left but to give up. When this happens, our advice is to keep your cool and not let stress get the better of you. Hitting rock bottom doesn’t mean all is lost – whatever you need to avoid doing is calling in a sudden loan or resorting to filing for bankruptcy because these approaches may not always be the best solution since they impact the rest of your life!
CONSIDER REFINANCING
keeping your credit score in-tact
Once you have your credit score where you want it, it’s important to maintain that run rate. You can help prevent it from falling out of line again by making sure you never use more than 30% of your available credit and that you make payments on time, every month. This can mean paying even the minimum amount due; however it is still important to be keeping up with those updates and recognizing what they entail.
Source: The Credit Challenge – Dominion Lending Centres
How to know if you have enough credit ?
Powered by Dominion Lending Centres, Concept One Financial Group is a team of mortgage professionals work for our customers – not the lenders – to ensure our customers receive the best rates and products available in today’s marketplace. Whether they are looking to purchase their very first homes or upgrade to a new home, mortgage renewal, refinance for equity take out, purchase investment properties.
Our lending solutions are catered for the conventional, self-employed, new immigrant, and non-resident; residential and commercial mortgages; Insurable and uninsured. As is customary in the field of Canadian mortgages, we deal with big banks, smaller lending institutions and private lenders. Each client’s financial needs differ, which is why we work with a variety of lenders.
