Poor Credit Score Mortgage Solutions: Are Millennials at Risk
Millennials are responsible with consumer debt, but are they too responsible? Research indicates that not accumulating debt could hinder, rather than help, millennials' financial future -- especially when it comes time to buy a house. Here's why more millennials are having to turn to poor credit score mortgage solutions to purchase a home.
Millennials Saying "No" to Credit
Not having an established credit history is one of the top reasons more millennials are relying on poor credit score mortgage solutions. Statistics show that most millennials prefer debit cards to credit cards for everyday purchases. In fact, one survey found that fewer than 30 percent of adults aged 18-29 even owned a credit card. Unfortunately, this reliance on debit instead of credit could be doing millennials more harm than good in the long run; not only do credit cards help millennials build a credit history, but they also protect against fraud and offer rewards that debit cards don't (such as cashback).
Millennials' Credit Scores Impacting Buying Power
To qualify for the best mortgage products and interest rates, borrowers generally need to have a credit score between 660 and 850. Anything below this is usually considered insufficient to qualify for prime interest rates. According to the Financial Post, the credit score of the average millennial is 625. Since a borrower's credit score is a prime factor in obtaining mortgage approval, many millennials are seeking out poor credit score mortgage solutions.
Millennials Less Loyal to Brands
Because millennials don't maintain long-term relationships with banks, lenders, insurance companies, and other financial institutions, many of them overlook the value of having a credit history until it comes time to make a large purchase such as a home. Poor credit score mortgage solutions are offered by mortgage brokers who maintain relationships with banks, financial institutions, and private lenders, and can help millennials navigate the complex mortgage market.
Poor Credit Score Mortgage Solutions in Edmonton
Are your financial habits helping or harming your home ownership goal? We can help you assess your current financial situation and determine the best strategy for purchasing a home. Contact us today at our Edmonton office for more information about poor credit score mortgage solutions.