There is more than one path
Often, yes - but only if the borrower and property fit a lender whose guidelines address the specific issue. There is no useful one-size-fits-all answer here, because lenders assess risk in different ways. For Ontario borrowers, the practical question is which lender category can support the file at a cost and term that still make sense.
Debt affects more than the credit score
For this particular question, large credit-card balances can increase required monthly debt payments and reduce mortgage affordability even when payments are current.
Utilization can be a separate issue
What changes the answer is that high balances relative to limits can depress a score and signal cash-flow pressure. Reducing utilization before applying may improve both the credit profile and debt-service picture.
Do not consolidate blindly
A useful distinction is that using mortgage debt to pay off cards can lower monthly interest costs, but it converts unsecured debt into debt secured by the home. The spending problem also needs to be addressed.
What can hurt
A borrower who pays down revolving balances before applying can sometimes improve both the credit profile and monthly debt calculations. That is more useful than simply applying to another lender with the same numbers.
Documents to have ready
- For the review, collect a current credit report and explanation for major negative items
- For the review, collect recent income documents and proof of employment or business activity
- For the review, collect statements showing down payment, home equity, or existing mortgage balances
- For the review, collect a list of monthly debts and any amounts that will be paid out at closing
Talk to Approval Path Mortgages
The answer becomes much more useful when it is tied to the borrower’s actual timeline and property. Approval Path Mortgages can review the file, compare suitable lender categories, and explain the cost and trade-offs before another application is submitted.
No credit check. No documents. No obligation.
General information only; mortgage approval and terms vary by lender and borrower. Not legal, tax, insolvency, or financial advice.