Credit Demystified! with Natalie Mitchell and today’s guest Wendy Goodsir returns for a discussion of the good, the bad and all the details on credit. they dig deep into lenders, credit history and what you should do today to be successfully set up for your first mortgage. Let them put you on the right track for your credit journey!
Credit formulas can be confusing. It includes a mixture of payment history, amounts owed, length and types of credit, which can get confusing real quick. Past behaviour is the best indicator of future behaviour, and the higher the credit number, the better things look for us. As they pull these terms apart, we can all be better equipped to use credit to our advantage. A higher number is especially essential when looking into purchasing your first real estate property.
“The higher the number the better things look for us.”
Utilizing your credit to your advantage is crucial in this process. If you are just starting out, begin by getting a credit card and making consistent monthly payments back to build up history. And investigate an RSP loan. Keep your credit card balance between 50-75% of the credit card limit. For mortgages, we need to verify that you can pay this money back, and credit is the way to prove that.
As we all begin to understand these concepts, we can more confidently dig into the mortgage lending process. How does all this play into the home purchase cycle? Lenders are going to start with your credit score in confirming whether you can purchase or not. A great mix of credit is what they are going to be looking at. The Total Debt Servicing Ratio (TDSR) is a magic number that shows if you will qualify for your mortgage. A small behaviour can have a catastrophic consequence on your ability to qualify on your TDSR. But there are solutions to any credit bracket. And this team is here to help you get your feet on the ground.
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