The mortgage qualification process is one of the most influential details in your home purchase. The more favourable of a mortgage you qualify for, the more successful your market venture will be.
Even if you are working with robust financial resources such as an above-average income, holding a strong credit score informs your bank or lender that you are qualified to take on and repay debt reliably. With that in mind, monitoring and optimizing your personal credit becomes particularly important ahead of buying a home.
Buying a home in Toronto? Our strategic buying services can help you optimize your purchase in any market. Call us at 416.441.2888 or reach us by email at info@christensengroup.ca.
Why Credit Score is Important
As you look to obtain a mortgage for your home, your bank or lender will closely analyze your personal finances to determine what they are willing to offer you towards a mortgage. While assessing your finances, they’ll focus on a number of key factors – including your personal credit.
Taking stock of your finances ahead of your home purchase? Check out these blog posts to learn about the process of obtaining a mortgage in Toronto.
- How to Find the Right Mortgage Lender
- The Mortgage Stress Test Explained
- What Not to Do Once You Have a Mortgage Pre-Approval
How to Improve Your Credit
Whatever your credit standing may be, there is always room for improvement. At the end of the day, the better your credit is, the smoother and more favourable your buying experience will be.
Be Punctual With Payments
As you may expect, credit payment history is highly influential in determining your credit score. Therefore, it is absolutely critical to be punctual with bill payments. As you are increasingly on time with payments, your credit score will improve automatically.
In instances where you can’t cover the entire cost of an individual bill, strive to cover at least the minimum payment amount. While this won’t directly improve your score, it can prevent it from getting worse.
Take Care of Overdue Invoices
In the same vein as remaining punctual with payments, managing and rectifying any overdue bills will also be a necessary facet of improving your credit score. If you are behind on any personal credit accounts, bring them up to date as soon as possible.
Keep an Eye on Your Balance
Maintaining a strong credit score requires balance. In other words, limiting the amount of available credit used to ensure you can manage it appropriately in the long term. Using up a major portion of your available credit can harm your credit score even without totally exceeding your limit.
As a general rule, it’s most optimal to only use as much as 50% of your available credit. While this is fairly restrictive, it‘s a helpful mark to work towards. If you have concerns about managing your finances within these parameters, consider asking your bank for a credit limit increase.
Limit New Credit Accounts
Finally, avoid opening new lines of credit, credit cards, or any other type of account. Having an abundance of credit checks on your record can reduce your creditworthiness in the eyes of lenders.
Searching for more purchasing advice? Explore these other resources from our blog.
- Do Toronto Condos Hold Their Value Like Homes?
- The Strategic Value of a Starter Home
- How Can You Get The Upper Hand in Today’s Market?
Buying With Christensen Group
If you’re looking to make a sound real estate investment in the complex Toronto market, you won’t want to go in alone. With over four decades of experience, Christensen Real Estate Group makes finding your next home seamless. Our team includes Accredited Buyer Representatives, Certified Luxury Home Marketing Specialists, International Real Estate Specialists, and Certified Negotiation Experts—all working to get you the best possible price, terms, conditions, and value for your home.
Beyond simply helping you find a great home, our connections to local lenders can help you secure financing and optimize your purchase whatever your financial status may be.
Hoping to make the most of your home-buying budget? Our strategic buying services can ensure you optimize your investment. Reach out to get started. Call 416.441.2888 or email us at evan@christensengroup.ca.
