What is the minimum credit score I need to get a mortgage?
If you have never paid much attention to your credit score before, it can take you off guard when it is time to apply for a mortgage. In many cases, your credit score is one of the most important determining factors when a lender is deciding whether or not to grant you a mortgage. You may be wondering whether your credit score is going to be good enough for you to get a mortgage of your own.
What is a credit score, and what score is considered “good”?
Your credit score is a number that determines your financial health – lenders often use this score to determine whether you are an acceptable risk. You score will be a number between 300 and 900 and factors that go into calculating this score are credit history, whether you have been late with payments in the past, the average length of time of you have had credit and so forth.
A score of 650 is generally considered good, while a score over 700 is considered excellent. In Canada, to get a mortgage from a traditional major lender such as one of the big banks, you usually need to have a credit score of 680 or higher.
If I have a lower credit score, can I still get a mortgage?
If your credit score is under 680, chances are that you will still be able to get a mortgage – just not with an “A” lender. Fortunately, mortgage brokers have access to other types of lenders such as “B” lenders and private lenders.
Many of these lenders specialize in helping people in different situations – including helping people with lower credit scores to get loans to make a home purchase.
What kind of mortgage can I get if I have a lower credit score?
Typically, if you have a lower credit score, you will be considered a higher risk by the lender. This means that will likely have to pay a higher interest rate than if you had had good credit. The good news is that mortgages with alternative and private lenders tend to be for shorter terms, so mortgages from these companies can be a good short-term option to help you get into a home of your own while you are building up your credit.
Whether you have excellent credit, or whether your credit score could use a little work, Matrix Mortgage Global can help you get a mortgage that is suitable for you. Contact us today to learn more.