Anybody help me about how credit check while purchasing home......!
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Hello All CD's
I want to know how bank and mortgage company consider your credit while you are planing to buy a house.
They consider your credit as per your payment you made in your credit card purchase or as per your credit card limit? let me clear more.. at present i have a credit card with TD canada and limit is $1000 that credit card myself and my wife both we are using the same card as provide by TD canada.
As i know at present i build up only my credit as per TD canada I am planing to buy house in next year. my question is.............
1] is it ok my credit card limit or i have to increase my credit card limit? as i am planing to buy house in next year?
2] how mortgage co. or bank is count my credit while i am going to buy house.
3] Is it advicable to buy another credit card on my wife name or is it not necessary?
4] when i am going to purchase house my wife credit help me or not?
5] if i have more CC limit will it help me to build strong case or not?
FYI ...........I have a good job in Automobile sector.
I have no idea about credit card matter as i am basically from Tech. background. Anybody help me regarding these matter i will be highly thankful.....
Waiting for positive reply......................
Regards
Quote:
Originally posted by RBO
Hello All CD's
I want to know how bank and mortgage company consider your credit while you are planing to buy a house.
They consider your credit as per your payment you made in your credit card purchase or as per your credit card limit? let me clear more.. at present i have a credit card with TD Canada and limit is $1000 that credit card myself and my wife both we are using the same card as provide by TD Canada.
As i know at present i build up only my credit as per TD Canada I am planing to buy house in next year. my question is.............
1] is it OK my credit card limit or i have to increase my credit card limit? as i am planing to buy house in next year?
2] how mortgage co. or bank is count my credit while i am going to buy house.
3] Is it advisable to buy another credit card on my wife name or is it not necessary?
4] when i am going to purchase house my wife credit help me or not?
5] if i have more CC limit will it help me to build strong case or not?
FYI ...........I have a good job in Automobile sector.
I have no idea about credit card matter as i am basically from Tech. background. Anybody help me regarding these matter i will be highly thankful.....
Waiting for positive reply......................
Regards
Hi RBO,
Your credit report is one of the most important factors used by lenders to determine your credit worthiness when you apply for any type of credit; be it a loan, line of credit or mortgage. This gives the lender a snapshot of your credit and lets the lender know the amount and time of exposure you had to any type of credit and whether you have behaved responsibly in the past as lenders believe that your past actions dictate your future behavior.
The answers to your questions are as under:
1. Your exposure to credit is very limited. You only have one card and the limit is also quite low. It is advised to have at least 2 cards and one line of credit as the lenders also see number of ‘trade lines’ you have. Moreover, it would be better if the credit limit is more than what you have right now. Also, it is good to have separate cards for spouses so as each one should have exposure to credit and build a good credit history.
2. If you do what I explained in point one and make your payments in time, you will have a pretty good credit history and the mortgage lender would view you as a very good candidate.
3. Yes. See answer number 1.
4. It is good if both the applicants have good credit.
5. Yes. See answer number 1.
For more information visit http://www.equifax.com/EFX_Canada/consumer_information_centre/faqs_e.html
And http://faq.transunion.ca/faq07/GeneralDetails.asp?
Still, if you have any questions, feel free to email or contact me.
Good Luck.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Location: carl sagan's universe
Posted on: 01-10-07 22:47:52
Hi,
Even though Pramod has provided sound advice, there is no hard and fast rule.
A person I know arrived last year in June and had a secured credit card for $2000 with Scotia. His wife also had one from the same bank for $1000.00
Both secured jobs with total of $78,000 total income. In Dec their score was in the 700s when they applied for a pre-approval with Scotiabank.
In May of this year they located their residence and in July moved in.At that moment along with mortgage they got a line of credit for $15,000.
Upto then their only limit for credit was $3,000 in credit cards.
However, even I think $1,000 is too low for them to gauge your creditworthiness.
If however you have 20% down as a few have, then hey you got it made.
Thank you Pramod saab and Mr. investpro for reply.
Is it fine if i go for my crdit card limit upto 2500 to 3000 or is require more? as i am going to apply another card on my wife name with around $1000 card. As per TD bank they call me and they pre-autho. upto $20,000 limit on my credit card and they left decision on me that how much i want to increase my crdit card limit.
Please advice me,
Thanks
Quote:
Originally posted by RBO
As per TD bank they call me and they pre-autho. upto $20,000 limit on my credit card and they left decision on me that how much i want to increase my crdit card limit.
Please advice me,
Thanks
20k is way too much on CC. Consider if you loose it somewhere.
TD did this to my wife as well. They increased the limit on Classic Visa to 30k (if I remember correctly). Eventually it was pulled down to 1000.
Keep it reasonable.
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Mumbai Maazi Ladki ...
Thanks Maharaj..........
For first time buyer there are too many things to consider along with you good credit history:
1. Try to calculate affordability on one person salary like mortgage/tax/maintenance expense.
2. Should have 6 months backup plan in bank a/c if nobody is working or some emergency.
3. Must be able to down payment 20%-25% for that house otherwise that house is not made for you.
4. Never go for 40 yrs, 50 yrs mortgage plan.
5. Do your homework pretty well like no-one helping you and you have to dig all the right information? For you this is the biggest purchase of your life for others it's just a transaction
6. Then figure out how much price home you can afford if not then wait for good times.
Someone will tell you that all that points look like old time values and market has changed now.
