Smarter Borrowing

Smarter borrowing is important when you’re about to buy a home – you just can’t buy a home unless you really understand how to borrow smartly.

Credit History Matters

The first thing you need to know is that credit history matters when looking for major financing. If you have a history of borrowing and not repaying, you’re going to have a rough time finding a lender that wants to work with you.

Your Credit Score Matters, But It’s Not the Only Thing

Your credit score or FICO score matters when buying real estate, but it won’t be the end all be all determining factor for lenders. Combined with your credit history, a lender will judge your credit worthiness based on how you’ve treated your credit.

Check Your Credit Report Before You Apply

Before applying for any credit you’re going to need to make sure that you get your credit report to check what’s going on. If you want to get your FICO score included you’ll need to get your report from Equifax Canada or TransUnion Canada.

Work on Improving Your Credit Score

If you have bad credit you’ll want to work on improving your credit score. When your score dips below 600 you’re in trouble. If it is above 600 to 720 you’re in great shape.

No Credit? You Might Need a Co-signer

If you don’t have a credit history you may need a co-signer to get a mortgage. Many lenders just won’t want to work with you unless you have someone with an established credit history and employment to get the financing you need.

Secured Credit Can’t be Discharged

If you choose a secured credit option, you must know it can be almost impossible to get it discharged, even in bankruptcy. Using equity in a property you own for example to secure financing can spell disaster if you can’t repay what you borrow. Be very careful about who you work with and how you finance.

Unsecured Credit Goes Off Your Credit Score

An unsecured form of credit will rely more on your current credit history and score than it will equity in your home. Most solutions will inevitably use both, but an unsecured debt will be easier to discharge. Either type of debt can cause you to lose your home if you’re not careful.

Payday Loans Aren’t the Answer

Payday loans are quickly becoming a go to solution for many Canadians. Cash advances on your bank account can qualify as a pay day loan – but this form of financing will leave you poor. You don’t want to try and buy homes for sale with pay day loans. If you have to just save up and look for a better fit.

Whenever you’re planning on buying real estate (luxury homes for sale, rentals, etc.) you’ll want to have your financing options planned out ahead of time. No one wants to end up with financing that will end up robbing them in the end.

The Goodale Miller Team is the #1 team in Canada for Century 21 8 years running. Specializing in Oakville luxury real estate including Lakefront homes, infill building lots, condominiums and more. Visit http://www.goodalemillerteam.com/ for more information today!