Credit Ratings and Mortgages
I’m happy to have another guest post today from one of our favourite Mortgage Consultants, Michelle Reichart. Thanks Michelle.
Credit reports can make or break your chances of getting finances. I can’t stress how important it is in getting a mortgage to have good credit.
One of the most important things that lenders look at is something called your Beacon Score which is the name given to your credit score as published by Equifax and it indicates your overall credit worthiness. Anything over a 640 beacon score is considered to be good credit. Anything over 680 beacon score is very good credit. You want to be over a 680 beacon score in order to get the best mortgage rate, and better products.
People don’t take the time to look at their credit report and make sure everything is accurate. They also don’t take the time to repair their credit report when there is a problem until it is too late and they are trying to get a mortgage. Repairing a credit report takes time. A mortgage broker can show you ways on how to repair a credit report and to help you with this process.
Good credit means better rates, because the lenders look at the person as less of a risk. It is all about how much risk the lender is willing to take on a person. The more the risk the higher the rate yet, the biggest debt is a person’s mortgage and this is usually not on a credit bureau. Surprising!
Bank of Montreal reports on a credit bureau but not RBC or Scotia Bank. Virtually no non-banks report on the credit bureau either. I think in the near future this will change.
Just because mortgages are not on your credit bureau, the lenders do check with each other. If you have a mortgage and your credit rating is not the best, the lender will call to get a “mortgage rating”. The mortgage rating will let the lender know if you missed a payment and what type of risk you are to the lender.
Be sure to look at your credit rating. It is important. To see your credit rating you can go to my web-site. Go to the drop down menu, under Residential Mortgages- hit bruised credit- bottom of page is Equifax and or Trans Union. There is a small fee to get your credit rating.
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