How To Avoid The Common Mortgage Pitfalls

A home is the largest purchase most people will make in their lives.That should reinforce the importance of planning ahead, doing your research, relying on the advice of experts and not rushing through the process.With nearly 700,000 homes purchased in Canada each year, there’s no shortage of anecdotes about the issues and surprises that can arise.While a mortgage broker can help you avoid many of the pitfalls commonly encountered during the home buying process, it’s still important to be informed even before you start looking for that perfect home. Here are just a few examples:

1. Not checking your credit report before applying for a mortgage

Put simply, not knowing your credit score prior to applying for a mortgage is akin to not brushing your teeth before visiting the dentist.

Your credit score can have a huge impact on the best rate you’ll be able to secure. For example, some lenders will offer a borrower with a 640 credit score rates that are a full 0.25% worse than someone with a score of 750. For conventional mortgages (those with down payments of less than 20%), the ideal target score is around 720.

You don’t want to discover your credit score is sub-par in the middle of a mortgage application. Knowing this information beforehand gives you time to improve your score, or address any errors that may appear on your report. You can easily check your score through Equifax or TransUnion.

Anyone with a credit score less than 680 (the minimum credit score to get the best rates) should be prepared to pony up for a higher interest rate and will likely qualify for a smaller mortgage.

Current Interest Rates
5 Year Variable2.30%
1 Year Fixed2.44%
2 Year Fixed2.54%
3 Year Fixed2.79%
4 Year Fixed2.94%
5 Year Fixed (High Ratio)2.79%
5 year Fixed (Uninsurable)2.99%
7 Year Fixed3.59%
10 Year Fixed3.74%
Home Equity
Line of Credit
3.70%

Rates are subject to change without notice. For the most current rates, call (306) 244-4663.