Personal Finance

Best way to handle this situation? (mortgage/poor credit)

  • Last Updated:
  • Feb 6th, 2015 2:00 pm
Feb 4, 2015
3 posts
Winnipeg, MB

Best way to handle this situation? (mortgage/poor credit)

Current situation: my significant other and I are in the process of looking at purchasing a house together (which would be the first home for either of us) and we're faced with an issue where her credit is great and mine is bad. Not sure of her exact score, but mine is sub-600.

I poorly mismanaged my credit at a young age and have one reported instance of an account going to collections on my credit report. My debt never exceeded $3000 - which I understand is likely irrelevant - but has been paid off in full for just over a year now. While my credit is poor, neither of us currently have any outstanding debt whatsoever and I recently acquired a Capital One secured CC with the intention of using it for minor purchases in order to rebuild credit.

My annual income is roughly $50000 and hers is roughly $55000 and both of us have considerable employment history, as well as the capability of acquiring letters from employers to verify that, etc etc.

My question is this - what is the best way to go about applying for a mortgage? I've been reading online and I'm a bit overwhelmed with my information out there, but I understand that in certain situations, it may be possible for us to go about it in a way that allows her to be a primary applicant on the mortgage, which allows banks to pull only her history but still allow my income to factor into our borrowing potential? That may be misinformation though.

If it matters, we are both in a position with our personal savings / RRSPs to be able to contribute enough to make at least 20% down payment.
6 replies
Nov 24, 2008
63 posts
My opinion is to just wait, if you have a secured card with Capital One and your collections item is paid off then I recommend waiting until your score rises. From my understanding she would have to apply alone as you wouldn't qualify for CMHC, so unless you have a massive down payment I don't think you have much of a choice. What is your score exactly? 580? 500? I am not a professional by any means but this is just my thoughts.

Edit: Just noticed you could avoid CMHC, depending on your credit score a lender would still need to take you on. Which could be difficult.
Deal Addict
User avatar
Nov 26, 2003
1286 posts
Call a mortgage broker and find our. Or call your bank. You won't get answers here.
Jr. Member
User avatar
Aug 26, 2014
131 posts
Markham, ON
Try this mortgage broker if you live in the GTA, it costs you zero and she will recommend you the best way to handle your financial situation. She will apply the mortgage with different banks so you don't have to go to different banks.

Eleonora Salerno, AMP
Mortgage Broker
Licence No. M08004519
TMC- Mortgage Loans Canada Inc.
Brokerge Lic. 10100
9411 Jane Street, Unit 1
Vaughan, ON L6A 4J3
(905) 850-1259 - OFFICE
(416) 505-1034 - Cellular
(905) 850-5604 - fax
Deal Fanatic
Apr 23, 2009
5161 posts
South of Ottawa
+1 for a broker. They've seen every situation around and give good advice and let you know what your potential options will be.