While house prices in Markham and much of the rest of Ontario have fallen a bit at the end of 2018 and start of 2019, they still cost a lot more than even a few years ago. Even with the price decrease, homes in Markham or other suburbs of major Canadians cities can often cost well over half a million dollars.
As you can imagine, most people don’t have that kind of cash just sitting in their bank accounts. In order to be able to afford these homes, most people must get a mortgage.
Interested in entering the Canadian housing market? Read this first.
Credit Score Required for a Mortgage in Markham
Getting a mortgage in Markham isn’t something that will automatically happen to everyone. You need to apply for one and not everyone gets accepted. When looking to accept or deny people for mortgages, lenders in Markham will look at a number of different factors.
Before you apply, make sure you learn about Canada’s mortgage stress test.
They will look at the current debts you have, your bank statements, your employment history and if you have a stable income. In addition to that, they will also look at your credit. The higher your credit score and better your credit, the more willing a lender will be to offer you a mortgage.
So exactly what type of credit score is needed in order to get a mortgage? In Canada, credit scores range from 300 on a low end up to 900 on a high end. Generally, any credit score over 640 will be accepted for a mortgage. All lenders will have their own credit score requirements, so this number will vary.
However, some lenders in Markham might be willing to bend these rules a bit in certain scenarios. For example, if you have a bad credit score, but a very high income and low debt, some lenders might be willing to work with you.
Check out this infographic to learn more about credit scores.
How to Save For a Down Payment in Markham
While getting a mortgage is one of the most important parts of becoming a homeowner, so is a down payment. Not only does a down payment reduce the size of the mortgage you need to get, but having a large down payment can often get you a better interest rate and better terms. Also, having a large down payment means you have smaller mortgage payments and can help you avoid mortgage insurance (as long as it is over 20%).
Unfortunately, saving for a down payment is often easier said than done. Thankfully, we have some tips to help you save for a down payment in Markham. These include:
- Automate your saving. If you have money automatically go into savings every month, you won’t be able to overspend or forget to save.
- Try paying down any existing debt beforehand, this way monthly payments won’t be eating away at your savings.
- Hold off on large vacations and other big expenses (if possible) and put that money toward your down payment.
- Consider living below your means for a few months. The money you save on entertainment, eating out and more will all help contribute to a larger down payment.
As for how long you should save for a down payment on a home in Markham, that all depends on your unique situation. Some people will save for a couple of months while some might spend a few years saving up for the appropriate down payment.
Need to borrow money for your down payment? Be sure to look at this.
How to Compare Mortgage Offers in Markham
While thousands of people in Markham get mortgages every year, not all mortgages are created equally. What someone might see as a great mortgage might not be the best option for you. While people will often look at different interest rates as the differentiating factor for loans, this isn’t the only thing to look at.
In addition to interest rates, you should also look at and compare:
- Term
- Amortization period
- Penalties
- Pre-payment options
- Is the mortgage closed or open?
- Is the interest rate variable or fixed?
Each mortgage will have a different combination of these factors and it is up to you to decide what type of mortgage will work best for you. Also, if you only visit one lender in Markham, you are not likely to get the best mortgage possible. Each lender in Markham will have different deals, terms or offerings, so be sure to shop around for the best one.
Click here if you’d like to negotiate the best mortgage contract this year.
The Best Mortgage For Your Needs in Markham
Looking to purchase a home in Markham? Need a mortgage? If so, Loans Canada can help you choose the right licensed mortgage professional based on your unique needs.
Note: Loans Canada does not arrange, underwrite or broker mortgages. We are a simple referral service.
