If you have been looking for a home in Milton or anywhere in the GTA, you will know that home prices are high! Affordable homes in Milton have continued to increase in value this year, even as larger detached home prices have softened and dropped. In addition to high prices, there have been mortgage interest rate increases and mortgage rules changes which have impacted the buying power of many individuals. You can read all about the changes in this article – 4 Housing Market Disruptors to Watch for in 2018.
At the same time, many families are quite indebted as they move through the ebbs and flows of modern day life. Families are faced with having to come up with money for daycare costs, children’s activities, reliable transportation to and from work and of course a few good vacations! Job losses and employment instability are common and the pressure to do and have is greater than ever!
Good credit and long-term employment with a solid employer continues to be of utmost importance to families looking to qualify for a mortgage. At the same time, many families are quite indebted as they move through the ebbs and flows of modern day life. Families are faced with having to come up with money for daycare costs, children’s activities, reliable transportation to and from work and of course a few good vacations! Job losses and employment instability are common and the pressure to do and have is greater than ever! Qualifying for the best possible mortgage rate will help you to save money on your monthly carrying costs and help you to pay less interest over time.
This week on LIVE With The House Mom, I had an opportunity to chat with Kim Boehlke Mortgage Agent from Champion Mortgages Inc. Kim has years of experience with helping clients apply for mortgages and has coached many of her clients to optimize their credit scores, allowing them to qualify for the mortgage they want at the best possible rate.
Typical Beacon scores range anywhere from the 500’s – 800’s. But, there tend to be magic numbers within that range that lenders look at when they are considering mortgage applications. 600, 650, 680 and 720 tend to qualify you for different types of mortgage products, rates and advantages depending on your situation and the lender. It seems that lenders are looking very carefully at credit these days and the current lending environment is quite stringent.
While there is information available from the credit scorekeepers Equifax, Experian and TransUnion there are pieces of the credit score puzzle which are not 100% clear. Here are some of Kim’s top tips to optimizing your credit score. These tips can help you turn your credit around quickly or improve your credit score from good to excellent!
- Payment history accounts for 35% of your score. When lenders are considering a client, they will look through every line of your credit report and review your payment history. Paying your bills on time will paint a better picture. Also, if there was a specific payment that you didn’t pay on time, be sure to provide a reason so that the underwriter can consider it while reviewing your application.
- You have to have credit! Maybe you’ve had problems with credit in the past or are new to the country. It is really important that you have access to credit that you use on a regular basis. While it might seem counter-intuitive, the best way to build credit or re-establish credit is to use it. The best way to start is with at least one credit card with a limit of around $2500. Be sure to use the credit card regularly and be sure to pay it off on or before the due date.
- 35% of your credit score is based on your available credit vs. the amount of credit you are currently using. Kim’s best advice is to not allow your credit balance to exceed 50% of the allowable limit per credit product you have. The Equifax website says that you can go up to 75%, but having extra discipline in this area will help you to stay out of trouble!
- Finally, if you have good credit, consider applying for an unsecured line of credit. This type of product looks really good on your credit profile and usually comes with a better interest rate than credit cards, so if you have to carry a balance for a period of time, this product will save you money!
Curious about your buying power? Considering a move? Kim and I are here to help! Schedule a FREE consultation here!