Whether you are a First Time Buyer or looking for a Mortgage Refinance, you need to know about Credit Scoring

Matt Chan • September 5, 2012

Know and Understand Credit Scoring can save you thousands

As a mortgage professional, I look at a lot of applications and credit bureaus for both first time home buyers and for mortgage refinance applicants.  I am often surprised by how unaware we are of our credit scores.  Perhaps Credit Scoring should be part of the education we get in schools.  I really believe that it should be part of a General Money Management and Finance class to educate our children how important it is to have a good credit score and to understand the consequences if they don’t.

I recently wrote a two part series article on Credit Scoring titled “Credit Scoring and Why Should You Care” that is geared specifically for first time buyers and refinance applicants.  If you want to know more about credit scoring, the articles will answer a lot of your questions.  The articles can be found here:

Part 1:

Part 2:

When you apply for a mortgage for either a purchase or refinance, banks always want to see what your credit looks like.  You should regularly check your credit score at least once a year.  There are services out there that can alert you of any major changes to your credit.  If you are interested in obtaining a copy of your credit, you can order one directly from the two main credit reporting agencies in Canada: Equifax and Transunion.

The reason why I suggest regularly checking your credit score is for the following reasons:

1) Ensure it is accurate and there are no surprises.

I remember I worked with a First Time Buyer a few years ago and when we talked about his credit bureau, we discovered a $5,000 balance on his Visa that he wasn’t aware of.  Long story short: someone had fraudulently put a charge on his card and he was not aware of it.  He did contact Visa and due to the length of time that the balance was outstanding, he had to make a settlement with them.

2) Ensure you are on track to repairing your credit

This is geared more specifically to those who are looking to repair their credit.  If you are a first time buyer and was recently turned down for a mortgage because of your credit, you need to have a plan in place to ensure that you are on track to getting your credit back on track.  This also applies if you have either recently refinanced or are looking to refinance your home.  If you recently refinanced your mortgage to consolidate your debt, you want to ensure that you are getting back on track to repairing your credit so that you are in the best possible position when your mortgage is up for renewal.  If you are looking to refinance and have been recently declined for a mortgage, you need to ensure you are on track to repairing your credit so that you are in a position to refinance in the near term.

The key here is to have a plan.  Although the exact formula for credit scoring is not public, there is enough public information out there for you to work with to ensure you can have great credit.  Start today and build on your credit with small steps.  Over time, all the little things add up.

If you have any questions, please feel free to contact me.

Good luck!

 

Matt

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Down Payment Options for Canadian Homebuyers

By Matthew Chan • February 18, 2026
For most Canadians, the down payment is the biggest hurdle to homeownership. A down payment is the initial amount you contribute toward your property purchase, while the lender covers the rest through a mortgage. By law, Canadian lenders can only finance up to 95% of a property’s value, which means you’ll need at least 5% down to qualify. If you’re putting down less than 20%, your mortgage must be insured through one of Canada’s three default insurance providers— CMHC, Sagen (formerly Genworth), or Canada Guaranty . This insurance comes at a cost, but it can be rolled into your mortgage amount. The less you put down, the higher the premium. Since saving a down payment can feel overwhelming, it helps to know the different sources you can draw from. Here are the most common options available to Canadian homebuyers: 1. Savings & Personal Resources The most straightforward source is your own savings. Lenders will ask to see a 90-day history of the funds in your account. Any large deposits outside of regular payroll must be explained with documentation—such as the sale of a vehicle or a transfer from an investment account. This requirement isn’t just red tape; it’s part of Canada’s anti-money laundering rules. 2. Proceeds from the Sale of a Property If you’ve recently sold another home, you can use the proceeds as a down payment on your new purchase. Proof of the sale—such as the final statement of adjustments from your lawyer—will be required. 3. RRSP Home Buyers’ Plan (HBP) First-time buyers can withdraw up to $35,000 each (or $70,000 as a couple) from their RRSPs to put toward a down payment under the federal Home Buyers’ Plan . The funds are withdrawn tax-free, but they must be repaid over a 15-year period. This is a popular option for buyers who have been steadily contributing to their retirement savings. 4. Gifted Down Payment With today’s housing prices, many buyers turn to family for help. A parent or immediate family member can provide a gift that makes up part—or even all—of the required down payment. The lender will require a signed gift letter confirming that the money is a true gift (with no repayment expected) and proof that the funds have been deposited into your account. 5. Borrowed Down Payment In some cases, you may be able to borrow your down payment. This option is usually available only if you have strong credit and sufficient income. The payments on the borrowed funds are factored into your debt service ratios, so affordability is key. Lenders typically use 3% of the outstanding balance when calculating the additional payment. The Bottom Line A down payment doesn’t have to come from just one source—it can be a combination of savings, gifted funds, RRSPs, or other resources. What matters most is being able to show where the money came from and that it meets lender requirements. If you’d like to explore your options or learn how much you might qualify for, it’s never too early to start the conversation. Connect with us today—we’d be happy to help you create a plan and take the first steps toward homeownership.

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By Matthew Chan • February 11, 2026
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By Matthew Chan • February 4, 2026
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