Your credit score is an indicator of how you handle your credit, and lenders use this score to determine how much of a risk you are when qualifying you for a mortgage. It’s easy to get excited about purchasing your ideal condo, but if your credit score isn’t within the ideal range for lenders, there is a chance you won't qualify for the mortgage you want.
Homeownership is something you’re considering, but if you have outstanding debt it can seem daunting to also take on a mortgage. You may worry about being able to pay all of your monthly payments, or if you’ll even qualify for a mortgage while carrying additional debt.
Having debt of any kind is normal for anyone, and that includes today's home buyer. Credit cards, lines of credit, auto loans, they’re all commonplace in a typical household. But how much debt is too much, and will it affect your mortgage qualification?
In Canada, mortgage lenders require a down payment from the buyer in order to qualify for a mortgage. The minimum amount required is 5% of the sale price of the property you're buying. The primary reason for a required down payment is to show good faith to the lender you intend to fulfill your payback obligations as you’re financially invested in the initial payment.