Buying your own home in Canada is no less than an achievement. Particularly in Toronto, buying a home is a huge feat. However, many people, due to financial constraints, are unable to turn their dream of owning a home into a reality.
There are numerous options at your disposal for owning a home if you do not have enough finances to buy a home. For example, you can apply for a loan from a financial institute in Toronto.
Many companies and financial institutes, including banks, offer personal loans, Toronto. However, to obtain such a loan, there is a big condition that you have to meet. This condition is to have a good credit score.
Having a good credit score can not only help you to get small loans, Canada but also apply for a loan to buy your own home. Typically, these loans are offered by financial companies on easy terms.
The requirement of credit score varies as per the type of loan you want to apply. For example, if you have applied for small loans, credit score requirements are different than that of applying for a home loan.
Categories of Credit Score
Credit scores are divided into different categories i.e. excellent, good, fair, poor, and bad. If the credit score is 750 and above, it is considered to be excellent while it lies between 700 and 749, it is regarded as a good credit score. Similarly, if your credit score is in the range of 550 to 649 or 650 to 699, you will into the poor or fair category respectively. Lastly, a credit score of 550 or below is considered as bad.
The Requirement of Credit Score to Buy a Home
There is no fixed minimum credit score requirement when it comes to buying a home since it changes with the economic conditions of the country. For example, if the economy is shrinking, lenders may increase the minimum credit score requirement to buy a house.
Apart from economic conditions, numerous other factors also affect the minimum credit score requirement. These include the amount of down payment you are willing to pay, your income etc. Ideally, a credit score of 600 or above is considered to be viable for obtaining a loan to buy your own home.