Seller's Guide
The Real Cost of Selling a House in Quebec
Most sellers calculate their net proceeds like this: sale price, minus the mortgage balance, minus broker …
Picture a typical buyer: software engineer, good job, solid savings, excited about his first condo in Laval. He finds the place. He makes an offer. It is accepted. Then, three days before the financing condition deadline, his mortgage broker calls.
Credit score: 618.
The deal collapses. Twelve months later, after real work on his credit, he buys, but not that property, and at a higher price because the market had moved.
That story repeats more often than people think, and it is almost always avoidable. Here is how.
What score do you actually need?
Thresholds vary between lenders, but the orders of magnitude used in Canada are fairly stable:
| Score | What it means in practice |
|---|---|
| 760 and up | Best available rates, maximum flexibility |
| 700 to 759 | Good approval odds, competitive rates |
| 680 to 699 | Generally approvable at a major bank |
| 620 to 679 | Alternative lender likely, higher rate |
| Under 620 | Conventional financing is difficult |
Two details that matter:
For an insured mortgage, meaning less than 20% down, the insurer requires a minimum score of roughly 600 for at least one borrower. Below that, the insurance is refused, so the loan is too.
The score is not the only criterion. The lender also looks at your debt ratios, the stability of your income and the nature of your employment. An excellent score does not offset debt ratios that are too high, and the reverse is true as well.
The five factors, by weight
1. Payment history, about 35%. The dominant factor by far. A single payment more than thirty days late can drop a good score by dozens of points, and the entry stays on file for about six years. Automate at least the minimum payment on every account: it is the highest return protection there is.
2. Utilization, about 30%. The share of your limit that you use. Aim for under 30%, and under 10% if you are actively trying to raise your score.
A detail almost nobody knows: what counts is not your end of month balance, it is the balance at the moment the issuer reports your statement. You can pay your card in full every month and still show 80% utilization if your purchases land before the statement date. Pay part of it before that date and the effect shows up the following month.
3. Age of the file, about 15%. Never close your oldest card, even unused. Its opening date supports the average age of your file, and closing an account also cuts your total limit, which pushes your utilization up. Two negative effects from one decision.
4. Credit mix, about 10%. Having both revolving credit, like a card, and instalment credit, like a car loan, shows you can handle both.
5. New applications, about 10%. Every hard inquiry leaves a mark. They stay visible for about three years but weigh most in the first twelve months. Avoid any new application in the year before your mortgage request.
Worth noting: shopping your mortgage rate with several lenders over a short period is treated as a single search. It is the one case where multiple inquiries do not penalize you.
The thin file trap, very common in Quebec
Many Quebecers use credit sparingly: one card, no debt, everything paid in cash. That is excellent personal management, and it is a problem for a lender.
With fewer than three active accounts, or a history under two years, the system does not have enough data to compute a reliable risk. The result is not a bad score, it is an inconclusive one, and some lenders decline on that basis alone.
The fix is simple but takes time: open a second product, use it for small regular purchases, pay it before the statement date. It takes about twelve months for the file to become usable. That is exactly why you handle credit a year before buying, not three weeks before.
What fixes fast, and what takes years
In 30 to 60 days: lowering utilization. It is the fastest lever available. Paying balances down before the statement date can move the score as early as the next cycle.
In 3 to 6 months: getting an error corrected. They are more common than people think: a closed account still showing as active, a debt already settled, sometimes someone else’s file under a similar name. You are entitled to your file free of charge from both Equifax and TransUnion. Request both, they do not always hold the same information, and dispute anything false in writing.
In 12 months and beyond: erasing the effect of a late payment, building a thin file, recovering after a collection. There is no shortcut here, only clean payments, month after month.
Be wary of services promising to “repair your credit” quickly for a fee. What is accurate on the file cannot be removed, and anything false you can have corrected yourself, for free.
The checklist before requesting pre approval
- Pull both files, Equifax and TransUnion, and read them fully.
- Dispute any error in writing, and keep the proof.
- Bring every card under 30% of its limit, before the statement date.
- Do not close any account, even unused ones.
- No new credit application for at least six months.
- Automate all your minimum payments.
- Aim for twelve months of flawless payments before applying.
Two mistakes that kill the deal after approval
Buying on credit between approval and signing. The lender often re-checks your file just before funding. A car loan or furniture financing taken on in between can void the approval, days before signing at the notary.
Changing jobs during the process. Even for better pay. Employment stability is part of the assessment, and a probation period restarts the clock.
The right time to deal with your credit is the day you start thinking about buying. Not the day you find the property. The affordability calculator gives you the other half of the picture: what your income actually supports.
Want to know whether your profile is mortgage ready? Get in touch and I will connect you with a mortgage broker I trust.
Georges Matar
Residential Real Estate Broker · RE/MAX DU CARTIER INC.
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