7 SURE-FIRE WAYS TO GROW YOUR CREDIT SCORE

Mortgage basic's 22 Aug

7 SURE-FIRE WAYS TO GROW YOUR CREDIT SCORE

Have you ever wished for a simplified guide on how to actually GROW your credit score? Well today is your lucky day! We have had years of experience working with individuals who come to us with poor or damaged credit and we have found 7 steps that prove to be tried and true in fixing it.

First off though—why are we so focused in on credit scores? Simply put, your credit score details your history of borrowing money. It shows how timely you are on payments; how responsible you are with it and how you manage it.

In a Nutshell: Your credit score represents to the lender that you have proven yourself capable of paying your bills on time and are responsible when managing credit. You credit score will also impact the interest rate that you receive. So, when we are talking about mortgages, your credit score=very important.

Now that we have that covered, here are our 7 sure-fire ways to grow your credit and make the mortgage application process, a breeze:

1. Have at least 2 credit lines at all times
This means that you should always have 2 “tradelines” going. Whether this be 2 credit cards, a credit card and a line of credit and a car loan etc. You want to show that you can manage credit, and this is one easy way to do it. As an added note, the limit on the credit lines will need to be set at a minimum $2,000.

2. Make your payments on time each and every month
No skipped payments! You should ALWAYS make the minimum payment required on all your lines of credit each month.

3. Do not let your credit be pulled too often.
This one is something people often forget about. Having your credit pulled for new credit cards, car loans, and other things frequently raises a red flag for lenders and can significantly lower your credit score

4. Do not exceed 50% of the available credit limit on your credit card or credit line.
We know this one can be hard to do. One easy way to monitor this is to only use a credit card for certain fixed bills such as a cable/internet bill, cell-phone bill, etc. This way you can easily keep track of what credit you have used and what is available still.

5. If you have missed a payment, get back on track right away.
If you did, by chance, miss a payment, do not fret. Instead, get back on track with your month by month payments. Lenders would look at the one missed payment as an abnormality versus a normal occurrence if you are back on track by the following month.

6. Make sure each partner has their own credit.
We cannot tell you how frustrating it can be for couples when they realize that all their credit cards and lines of credit are only under one name…leaving the other person with no proven track record of managing credit! We advise clients to both grow their credit by making sure all joint accounts report for you both.

7. Do not exceed the Credit limit.
It is important to not go over or exceed the credit limit you have been given. Having overdrawn credit, shows the lender that you are not able to responsibly manage credit.

If you follow these 7 steps and are responsible with your credit, you will have no problem when it comes time to purchase a home! In need of more advice? Contact a Dominion Lending Centres Broker-they will be more than happy to help you.

Geoff Lee

GEOFF LEE

Dominion Lending Centres – Accredited Mortgage Professional
Geoff is part of DLC GLM Mortgage Group based in Vancouver, BC.

Mortgage Moment: When Life Gives you Lemons…

General 17 Aug

MORTGAGE MOMENT: WHEN LIFE GIVES YOU LEMONS…

We all do it. Even I fall guilty to it at times. It’s really a part of Human Nature…and really what fun is life without it?

What exactly are we talking about? Dreaming. We make grand plans and lay them out with the utmost care. We write them out, daydream about them, and (hopefully) we make them come true! There is nothing wrong with doing this…not a single thing! However, as many of you know, rarely do the dreams and plans we lay out stay on course as we would like them to.

This holds true many times for mortgage clients. We find that many times, what they initially come to us with when they are being pre-approved, rarely is the same less than 3 years later (There’s a reason 6 out of 10 Canadians break their 5-year term mortgage early).

Recently, we had just this happen with one of our clients. A young, working professional couple, found themselves in a difficult situation when one of them was injured and went on long-term disability leave.

Their income took a significant drop due to this and their cash flow was of course, negatively impacted. They relied (as many people do) on credit cards and at one point also took out a line of credit. They were able to make minimum payments each month on their loans and debts, but the problem sat with the interest rates. They kept getting higher and the debt they carried wasn’t being reduced.

Basically, life had handed them some lemons.

At this point, they felt they were left with one option: seek private funding. The problem with this was fear of losing their home if they approached their lender. The interest rate quoted by the private lender was less than that on their credit cards, but still higher than what was reasonable. The couple felt that seeking to obtain a second mortgage would be the best-case scenario. However, with a rate of 10% plus a lender fee of up to 6% of the loan amount and a 1 year term with renewal fee of 1% for total amount borrowed, this was not at all ideal!

This is where we stepped in and decided to make some lemonade! Here is how the story played out once they came to see us:

  1. We were able to use the income received from disability and refinanced their existing mortgage
  2. We consolidated the credit card and line of credit debt at a rate of 2.35% in doing so we reduced their current monthly payments by $1500 with an annual savings of $18,000! Or $90,000 over five years!

Here is a brief number summary to give you the full recap:

Value of the Home: $525,000

Requested Mortgage Amount: $420,000

Loan to Value: 80%

Income Documentation:

  1. Letter of employment and pay stub
  2. Letter from insurance company detailing disability payments and confirmation of deposit into current bank account.

Credit Score: 746 & 676

Total Debt Service Ratios: 41%

Mortgage Solution: All debts were paid with proceeds from their 5-year variable-rate mortgage with a 30-year amortization. The annual savings was MORE THAN $18,000!

 We helped this couple get back on track and allowed them to keep on dreaming! We understand that life rarely will stay on course and go just as you picture it, but there is often a creative solution that can help you get back on track. If life has handed you a few lemons and you aren’t sure where to start, visit a Dominion Lending Centres Mortgage Broker—they can make some of the best lemonade!

Geoff Lee

GEOFF LEE

Dominion Lending Centres – Accredited Mortgage Professional
Geoff is part of DLC GLM Mortgage Group based in Vancouver, BC.

WHY WE CHOSE A DLC MORTGAGE BROKER – OUR HOUSE MAGAZINE

Our House Magazine 14 Aug

WHY WE CHOSE A DLC MORTGAGE BROKER – OUR HOUSE MAGAZINE

Cindee and Dwayne Roy had always planned to get back to country living. The Alberta couple had done the big city and small town thing, but always had one eye on the simple life. After five years of searching, they finally found their dream home outside of Wainwright, Alta. It was a sprawling property, featuring 10 acres of land and a 1,600-square foot, modern home. At a purchase price of $445,000, they snapped it up last August.

“For me it was where it was situated. It just seemed very peaceful,” Cindee told Our House Magazine. “It’s kind of like coming home again. It’s so nice to get up in the morning and look out your kitchen window and you’re not looking in your neighbour’s yard.”

And when it came time to make the big purchase, the Roy’s decided to try something different. On the advice of friends, they chose to use a Dominion Lending Centres mortgage professional for their mortgage rather than using a bank. And it couldn’t have worked out better.

Q: Why did you choose a mortgage broker?

A: Actually, our broker was referred to us by one of our friends. We never really thought of it. You just go along and you get used to using a bank. We started to get a little upset with the way things were going with the bank and the way we were being treated and so one of my friends said, ‘You need to talk to our broker.’ We thought, what the heck, why not give it whirl? We phoned her up and instantly within in the first couple seconds, I thought this is our girl. So personable and friendly. She really goes to bat for you whereas I find with the bank they almost feel like they’re lending you the money out of their own back pockets. It was nice to work with someone who is rooting for you and fighting for you along the way.

Q: How was your experience working with a mortgage broker?

A: Absolutely wonderful. If we ever need to do a mortgage again we would always go back to our broker for sure. I keep telling my friends and family, ‘Don’t go to a bank. Use a mortgage broker.’ It’s a way better experience, more pleasant and little more personal. It was great.

Q: What advice would you give someone in your situation?

A: For anybody who has a had a few bumps along the way or struggled with whatever bank they’re using or feeling like you’re just a number, then definitely a mortgage broker is the way to go because you don’t feel like a number. You feel like you matter and it’s such a personal experience.

Jeremy Deutsch

JEREMY DEUTSCH

Communications Advisor

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A TAILOR-MADE SOLUTION FOR SOME BORROWERS

General 10 Aug

A TAILOR-MADE SOLUTION FOR SOME BORROWERS

Recently, two of my lenders came out with new products – Interest only mortgages. We have had these available from private lenders for many years but at much higher interest rates. They are useful for real estate investors and people who have consolidated debts and need six months to a year to get back on their feet. These new mortgages are not meant to be short term solutions but they are meant to be used for a minimum of two years and preferably for five years.
So who in their right mind would want a mortgage for five years where the principal doesn’t go down?

1- real estate investors- some investors are looking for cash flow; this is a perfect product for them. They want to keep monthly payments to a minimum so that they ca use the extra cash to buy other properties, or for income to live on. They will eventually sell the properties for a lot more cash when they are ready to retire.

2- Seasonal workers- Lobster fisherman, lumberjacks , oil patch workers and workers in the trades who have to go back to school every year for three years are the people who this product works for. During spring break-up when the oil patch closes for several weeks , the bills don’t stop coming. Working with your Dominion Lending Centres mortgage broker you can design a mortgage to help you through the periods when there’s no income coming in. The best strategy for you may be to step up the mortgage as interest only and then have the broker calculate what a normal amortizing mortgage payment for you would be. During your period of no income, you pay the minimum payments and then when you get back to work, you bump your payment up to normal or even slightly higher to make up for the shortfall.

These interest only mortgages are available with a variable rate, a fixed rate , a variable interest only plus a fixed amortized rate or a combination of any of the above rates. This allows you and your broker to customize mortgage payments to make the best mortgage for your particular situation. It’s like a tailor-made suit. It’s exactly what you need. Contact your local DLC mortgage broker for more information .

David Cooke

DAVID COOKE

Dominion Lending Centres – Accredited Mortgage Professional
David is part of DLC Clarity Mortgages in Calgary, AB.

Grande Prairie tax rates vs Canada’s hottest Metro Centres

General 3 Aug

Property Taxes in Canada’s hottest markets vs Grande Prairie

I’m sure you’ve all heard the rumours… Grande Prairie’s property tax rate is one of the highest in Alberta. Recently a very interesting article by Ephraim Vecina has been going around “Property taxes in Canada’s hottest metropolitan markets”. So I thought I would add some local flavour to this article.

When qualifying for a mortgage, the cost of carrying the property is included. This means local rates for electricity, heat, condo fee’s and property taxes all affect how much house you qualify for.

A smaller property tax is less money you pay each month, and also potentially an extra 10,000 or 20,000 on the amount of mortgage you can buy.

 

Here’s a quick summary of our local tax rates:

Property tax on a 1,000,000 home in Grande Prairie: 1.2864% ($12,864.50) at 1.2% our property taxes are definitely higher than in a lot of large centres. There is hope though. If you choose to live in the County of Grande Prairie: 0.4043% ($4043.6) your tax rates are a 1/3 of what you pay in the city.

                                     Town of Sexsmith: 0.7465% ($7,465.70)

                                     Clairmont : County tax rates 0.404% ($4,043.6)

                                      Peace River 1.2004%($12,049.3)

                                     Calgary: 0.65% ($6,500)

Edmonton: 0.8686% ($8,686.90)

You can find out the tax mill rate of any municipalty your intertested in living in by calling your local town council, and asking.

                                     Local tax Comparision by Jillian Napen 03 Aug 2018

Property taxes in Canada’s hottest metropolitan markets

Property taxes in CanadaIn a new report, real estate information portal Zoocasa compared the property tax rates of the nation’s hottest metropolitan housing markets, along with the widely varying economic fundamentals that underline these figures.

“Home buyers often focus on the home price when considering affordability, but often overlook the carrying costs such as property taxes, which can be a significant on-going expense,” Zoocasa noted as the motivation for the study.

Amid widespread concerns about housing costs and interest rates, Canadian home buyers have access to multiple locales of relative affordability – but these places are not necessarily those where property taxes are the lowest, Zoocasa stated.

Read more: Sudden price decline comes with great danger – MPC

Comparing the rates for each market as of July 2018, the cities with the lowest property taxes on a home assessed at $1 million are as follows:

  • Vancouver, British Columbia – 0.24683% ($2,468 in tax vs. a $1M home)
  • Abbotsford, British Columbia – 0.51300% ($5,130 in tax vs. a $1M home)
  • Victoria, British Columbia – 0.52035% ($5,204 in tax vs. a $1M home)
  • Kelowna, British Columbia – 0.52605% ($5,260 in tax vs. a $1M home)
  • Toronto, Ontario – 0.63551% ($6,355 in tax vs. a $1M home)

Meanwhile, the markets with the highest property tax rates were:

  • Saint John, New Brunswick – 1.78500% ($17,850 in tax vs. a $1M home)
  • Fredericton, New Brunswick – 1.42110% ($14,211 in tax vs. a $1M home)
  • London, Ontario – 1.35082% ($13,508 in tax vs. a $1M home)
  • Hamilton, Ontario – 1.26196% ($12,620 in tax vs. a $1M home)
  • Winnipeg, Manitoba – 1.24871% ($12,487 in tax vs. a $1M home)