Mortgages and Credit

 

 

Mortgages and credit work simultaneously together.   The more established credit with the higher scores assist significantly in acquiring the goals you are seeking.

The products endorsed by the insurers all have credit scores associated with them.   For example if you wanted to use borrowed money for a down payment you would require a score of 680 plus.

The entry level into mortgages, insured  less than 20% down, will require a minimum score of 600.

If you are seeking a private mortgage your score is not relevant.  If seeking a semi - private mortgage then 500 plus is more desirable.

CMHC currently allows scores above 680 to have greater debt to the amount of 44% of gross income.  Where scores less than 680 will have access to mortgages with debt less than 42% of the gross income.    The portion of the debt that can encumber the mortgage with a score above 680 is 39% and scores below up to 35%.  It deeply affects the amount you qualify to borrow.   These factors include $100 monthly for heat and the property tax component.

All credit cards and credit lines (not secured lines) are debt factored in using 3% of the balance to support the debt.  This can have a large impact upon your purchasing power.   

All mortgages placed with monoline, credit unions, insurance companies and banks must qualify using the fact 5.34%.   Although your face rate may only be 2.75% the qualifying number is based our current Canadian Stress level.  

Planning is one factor that is crucial in preparing for your mortgage.  It is important we do a review to uncover what your borrowing capacity is.   We have the experience to assist you in organizing your debt to increase your score and further assist you.

General Information
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