Before you apply for a mortgage pre-approval, you should check your credit score in order to make sure you can be approved for a mortgage. The bottom line is, the lower your credit score is, the more consequences you're likely to experience. This is why, even if it may take longer than expected, you may want to hold off on buying a house until your low credit score is resolved and I'll tell you why.
Before you apply for a mortgage
Ultimately, before you apply for a mortgage or even mortgage pre-approval, you should consider checking your credit score to ensure that lenders will actually provide you with a fair mortgage rate and interest rate. The better your score, the better the chance you have at obtaining the mortgage you've always wanted and you are one step closer to your dream home.
Otherwise, if you're seen as a high-risk lender who is likely to default on your monthly mortgage bill, lenders will charge you premium interest rates.
If you're someone who has bad credit, is going through a divorce or is currently single, or maybe you're considered self-employed and having a hard time convincing lenders you're an ideal mortgage loan borrower, you might want to opt for a non-traditional lender for a better shot at getting the mortgage you want, but also at an affordable rate. Non-traditional lenders are just as safe and secure as traditional lenders and have become quite the popular choice amongst Canadian homeowners.
If owning a home is your dream but you have a low credit score, don't fret. You can build it back up again so you can obtain a mortgage loan that you desire. It won't always be easy, but it's worth the effort in order to snag your dream home! Just keep paying your bills, worry about other debts first before applying for a mortgage, don't apply for other loans unless absolutely necessary, and keep your accounts open in order to keep your credit score up. You don't need a perfect credit score to get a mortgage in Canada, but it is suggested that the minimum credit score you should have is 600+ and that most traditional financial lenders will favour those with a credit score of 690 and up.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage.