When you’re looking to secure a mortgage, whether it’s for purchasing a new home or refinancing an existing one, your credit score plays a key role in determining your eligibility. In Canada, lenders consider credit scores a reflection of your financial reliability, so it’s essential to understand how this impacts your mortgage options.
Mortgage for Home Purchase:
For most mortgage providers, a minimum credit score of 600 to 650 is required to qualify for a conventional mortgage. However, this doesn’t guarantee approval—it simply opens the door to consideration. A credit score in the range of 680 or higher is often preferred by lenders, as it indicates a lower risk, potentially unlocking better interest rates and terms.
If your score is below 600, don’t worry. There are alternative lending options, including private lenders or B-lenders, who might be more flexible, though typically at the cost of higher interest rates. Working with a professional mortgage broker, like those at Dominion Lending Centres, can help guide you to the right lender for your specific situation.
Mortgage Refinance:
Refinancing is a popular way to tap into home equity, consolidate debt, or secure better mortgage terms. For refinancing, credit score requirements are generally similar to those for a purchase mortgage. A score of 600 to 680 is typical, with higher scores giving you access to lower interest rates.
One advantage of refinancing is that if your credit score has improved since you originally purchased your home, you could qualify for a more favorable mortgage. If your score is still low, alternative lenders may still offer refinancing options, but rates will be higher.
Whether you’re purchasing a home or refinancing, working with Dominion Lending Centres in Ontario can help you navigate the credit score requirements and secure the best possible mortgage solution for your needs.