Want to buy a home but have bad credit? Think long-term
When buying a home, long-range financial planning is key. When buying a home after having a history of bad credit, doubly so.
A mortgage is the largest financial decision most Canadians will make, and proper planning is key. Many believe that after a history of poor credit, being approved for a mortgage becomes impossible, but this is not the case. It is highly recommended to meet with a professional Mortgage Broker who can assist you in making your dream of home ownership a reality. In the meantime, there are steps you can take to put yourself on the right path.
The first step is to know where you stand in regards to your credit report. You can request a free copy of your report (or view it instantly online for a fee) from one of the major Canadian credit facilities; Equifax or TransUnion. Your report contains a history of all your current and past credit products, details regarding the payments you have made, and your personal score. A poor credit score can be anywhere between 300 and 560, while an excellent credit score ranges from 725 to 760 and up. 57% of Canadians are reported as having an excellent credit score.
If you have other debts that need to be paid off, you will need to ensure your budget will support these payments along with a mortgage comfortably. Putting yourself in a tight financial position while attempting to repair your credit will do more harm than good in the long run. Use an online mortgage calculator to assess the payments for your desired mortgage amount, and talk to an Ottawa Mortgage Broker to see how those payments will fit into your budget.