Oriana Financial Group of Canada Ltd.

Millennials: Is Buying A Home In Your 5 Year Plan?

Financial Post ~ February 24th, 2017

Buying a home is one of the largest and most important investments you’ll make in your lifetime; home ownership is still the single largest source of savings for Canadian households, as every payment you make builds equity. If you’re hoping to purchase a home in the next five years, or sooner, there are some key steps you should take to ensure you’ll be able to reach your goal of home ownership.

Know your current credit score and improve it

Many home buyers don’t realise the extent to which their credit score matters when buying a home. Ultimately, having a high credit score could mean you qualify for a higher mortgage. You can qualify for a good mortgage product with a credit score of 620 to 680, but if you have a credit score of 680 and above you’ll qualify for a significantly better mortgage.

Your credit score is made up of several factors including: payment history, utilization ratio, length of credit, types of credit, and inquiries.

If your score is below 680, good news: you can improve it. If it’s low strictly because of debt utilization ratio, it could improve in as little as 30 days if you pay down your credit card balance so it’s below below 70% of the maximum limit. Paying down your debt mid-month instead of waiting until the end of the month will also help increase your score faster. If your score is low because of your payment history, it should gradually improve over about 12-18 months with on-time payments.

Unlike many of the mortgage rule changes that have come into effect over the past year, having a strong credit score is in your control. If you’re planning to own a home, it’s a good place to start.

Mogo will give you your credit score for free* without an impact to your score, along with free monthly updates on your score so you can track how much it’s improved.

Click here to read the full article.


*Special conditions apply. Interest rates are provided for information purposes only and are subject to change without notice.

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