Canadian Mortgages: What are the Credit Score Requirements?
Perhaps one of the most important factors lenders will consider is your credit score when it comes to mortgages. With this, you'll get to qualify for different mortgage rates, allowing you to make big purchases.
Today, Canada requires a credit score of 680 or above to qualify for the best mortgage rates in the country. However, it's also important to note that some lenders accept credit scores that fall between the 600 to 680 window. But do note that these lenders may charge you a higher interest rate for your mortgage.
When it comes to mortgage financing, factors such as your credit score need to be considered because this can greatly affect your chances of securing a loan.
What Credit Score Do I Need to Secure a Loan in Canada?
It's important to note that not all lenders in Canada will have the same credit score requirements. This means that your credit score may vary from one lender to another. As such, it's important to know what credit score you need to qualify for a loan.
According to a recent study, mortgage rates in Canada vary depending on your credit score. For instance, average rates for those with poor credit scores will be higher than average rates for those with excellent credit scores.
This is because lenders are more likely to approve loans with less risk to them. They will be looking at borrowers who have excellent credit scores for such loans.
What Factors Can Impact My Credit Score?
While it's true that Canadians generally have excellent credit scores, it's also important to note that many, unfortunately, have bad credit scores. And when this happens, it may be because of factors such as:
Having too many debt obligations; Having high balances on credit cards; Getting too many inquiries on your credit report; Having unpaid accounts, and not making payments on time.
Each of these factors can negatively impact your credit score and make it difficult for you to secure a loan. Under such circumstances, it's important to ensure that your credit is in order.
Are There Ways to Get a Mortgage When You Have a Bad Credit Score?
While it's true that you may not get approval for a loan with a bad credit score, there are some ways you can secure a mortgage when you have bad credit.
There are Alternative Lenders who turn a blind eye to poor credit scores or even past consumer proposals or bankruptcies. They all require at least a 20% down payment and usually have higher fees - see info here: http://bit.ly/AlternativeLenders
Of course, speaking to credible mortgage brokers can help since they can assist you in navigating these financial complexities.
The Bottom Line: Credit Scores Play a Huge Role in Securing Mortgages in Canada
Today, credit scores play a huge role in securing mortgages in Canada. However, it's important to note that not every lender will have the same credit score requirements.
As such, it's important to speak to reputable mortgage brokers who can help you secure the right loan with the right mortgage rates.
How Can We Help You?
If you're looking for mortgage strategies in Canada, you've come to the right place. Our team at Level Up Mortgage streamlines the whole mortgage process for new homebuyers, newcomers, and self-employed individuals. Learn more about how we can help you today!