23 May

BLOCKBUSTER APRIL JOBS REPORT SIGNALS THE ECONOMY HAS TURNED THE CORNER

General

Posted by: Ryan Dykstra

Canada posted a record job gain last month, along with a decline in the jobless rate and a pick-up in wages, providing the strongest signal yet that the economy is coming out of a six-month slowdown. Other data this week portend a rebound in economic activity, including a strong bounce-back in exports and a surge in housing starts.

Statistics Canada announced this morning that employment rose by a whopping 106,500 in April, the biggest one-month gain since the start of this data series in 1976. This was dramatically above the median forecast of economists of 12,000 net new positions. The Canadian jobless rate fell a tick to 5.7%, near a four-decade low.

This report showed broadly based strength across regions, sectors and provinces. Full-time jobs jumped by 73,000, part-time positions rose as well by 33,600.

On a year-over-year basis, employment grew by 426,000 (+2.3%), with gains in both full-time (+248,000) and part-time (+179,000) work. Over the same period, total hours worked were up 1.3%.

Employment increased in Ontario, Quebec, Alberta, and Prince Edward Island. It declined in New Brunswick and was little changed in the other provinces. Quebec posted an unemployment rate of 4.9%, the lowest in recorded history. Jobs in Alberta gained steam following two months of little change.

Employment gains were spread across several industries: wholesale and retail trade; construction; information, culture and recreation; “other services”; public administration; and agriculture. At the same time, employment decreased in professional, scientific and technical services.

Construction punched above its weight for the first time in many months. Gains were concentrated in Ontario and British Columbia. This likely foreshadows a stronger spring season in existing home sales.
Provincial Unemployment Rates
(% 2019, In Ascending Order)

Province                                      April     March
British Columbia                        4.6            4.7
Quebec                                         4.9            5.2
Manitoba                                     5.2            5.0
Saskatchewan                             5.4            4.9
Ontario                                         6.0            5.9
Alberta                                          6.7            6.9
Nova Scotia                                 6.9            6.2
New Brunswick                          8.0            7.9
Prince Edward Island               8.6            8.9
Newfoundland and Labrador 11.7            11.5

For many months the labour market strength has been the mainstay of the economy. Many had warned as recently as last month that Canada could be headed for recession amid a perfect storm of negative factors — falling oil prices, volatile financial markets, higher interest rates, cooling housing markets and global trade tensions. But many of these elements have begun to dissipate.

Exporters showed across-the-board resiliency in March after shipments tumbled in February. Toronto’s housing market, the country’s largest, is stabilizing after a recent slump. There are also signs consumers continue to spend and borrow, aided in large part by the buoyant labour market, even amid worries about the outlook.

Even wages have strengthened. Pay gains for permanent employees rose to 2.6% year-over-year, the sharpest rise since August. Total hours worked also increased, rising by 1.3% annually in April, up from 0.9% in March. Youth unemployment fell to record lows.

Bottom Line: This very positive report opens up the possibility that the Bank of Canada might take a more hawkish stance at their next meeting. It might well be that a rate hike sometime later this year is no longer off the table. One critical uncertainty, however, is the heightened trade war between the US and China. If the two sides hike tariffs sharply, a possibility given the current sabre rattling, Canada’s economy could once again be hit in the cross-fire.

Dr. Sherry Cooper

DR. SHERRY COOPER

Chief Economist, Dominion Lending Centres
Sherry is an award-winning authority on finance and economics with over 30 years of bringing economic insights and clarity to Canadians.

21 May

Qualifying for a Mortgage!

General

Posted by: Ryan Dykstra

It’s not just because of finances.

As a mortgage broker I receive calls from people who want to know how to qualify for a mortgage. Most of the time it comes down to finances but there are other reasons as well.
Here are the 5 most common reasons why your home mortgage loan application could be denied:

1. Too Much Debt

When home buyers seek a mortgage, the words “debt-to-income ratio” quickly enters into the vocabulary, and it’s not without reason. Too much debt is a red flag to lenders, signifying you may not be able to handle credit responsibly.
Lenders will analyze how much debt you carry and what percentage of your income it takes to pay your debt. Debt ration is just as important as your credit score and payment history.
Two affordability ratios you need to be aware of:
• Rule #1 – GROSS DEBT SERVICE (GDS) Your monthly housing costs are generally not supposed to exceed 32% of your gross monthly income.
• Rule #2 – TOTAL DEBT SERVICE (TDS) Your entire monthly debt payments should not exceed 42% of your gross monthly income.

If you don’t have a good debt to income ratio, don’t give up hope. You have options available including lowering your current debt levels and working with your Dominion Lending Centres Mortgage Broker.

2. Poor Credit History

Some people don’t realize if they are late on their credit card/loan/mortgage payments the lender sends that information to the credit bureaus.
• Late/non payments on your credit report will make your score drop like a rock
• Exceeding your credit card limit, applying for more credit cards/loans will lower your score.
• Bankruptcy or Consumer Proposal will significantly impact your score, and stay on your credit report for up to 7 years.
Your credit history is a great way for a lender to tell whether you’re a risky investment or not. Lenders look not only at your minimum credit score, but also at whether you have a significant amount of late payments on your credit report.
Your Mortgage Broker will run your credit bureau to see if there are any challenges you need to be aware of.

3. Insufficient Income and Assets

With the high price of homes in the Vancouver & Toronto area, sometimes people simply don’t earn enough money to afford: mortgage payments, property taxes and strata fees along with their existing debt (credit cards, loans, lines of credit etc.).
You need to prove your previous 2 years’ income on your taxes with your Notice of Assessments (NOA). This is the summary form that the Federal Government sends back to you after you file your taxes, showing how much you filed for income and if you either owe money or received a refund.
If you can’t provide documentation to prove your income, then you will likely get denied for a home mortgage loan.
Some home buyers will need to provide more money for a down payment (perhaps a gift from their family) or try to purchase a home with suite income. In some cases, home buyers will need to add someone else on title of the home, in order to add their income to the mortgage application.

4. Down Payment is Too Small

A lender looks at the down payment as how much of an investment a buyer will be putting in their future home. Therefore, bigger is always better when it comes a down payment to satisfy your home mortgage loan application. Start saving now.
To qualify for a mortgage in Canada the minimum down payment is 5% for the purchase of an owner-occupied home and 20% for a rental property.
In Canada if you have less than 20% down payment, the federal government dictates that the home buyer must purchase CMHC Mortgage Default Insurance which is calculated as a percentage of the loan and is based on the size of your down payment. The more you borrow the higher percentage you will pay in insurance premiums.
For those with less than 20% down payment, the maximum amortization is 25 years, with more than 20% down payment 30-35 years (depending on the lender).

5. Inadequate Employment History

Most lenders will want to see a consistent employment history of 2 years when applying for a mortgage, because they want to know you’re able to hold down a job long enough to pay back the money they’ve loaned you.
To prove your employment, you will need to prove a Job Letter with salary details.

If you’ve been denied a mortgage, chances are it was because of one of the above five reasons. Don’t be deterred, with a little patience and some work on your end, you can put yourself in a position to get approved the next time you apply.

By Kelly Hudson

21 May

Understanding the B-20 Guidelines!

General

Posted by: Ryan Dykstra

A new survey has emerged showing that out of 1,901 owners and would be homeowners, 43% (more than two out of five) Canadians are not confident in their knowledge of the mortgage stress tests—despite them being in place for more than a year now.

We wanted to give you a brief set of notes regarding the guidelines. This is something you can use and reference whether you are a first-time home buyer or looking to refinance underneath these new guidelines. It gives a clear picture of what/how you are impacted as a buyer or someone who is looking to refinance.

Here’s what you need to know about B-20:

The average Canadian’s home purchasing power for any given income bracket will see their borrowing power and/or buying power under these guidelines reduced 15-25%. Here is an example of the impact the rules have on buying a home and refinancing a home.

PURCHASING A NEW HOME

When purchasing a new home with these new guidelines, borrowing power is also restricted. Using the scenario of a dual income family making a combined annual income of $85,000 the borrowing amount would be:

Up To December 31 2017 After January 1 2018
Target Rate 3.34% 3.34%
Qualifying Rate 3.34% 5.34%
Maximum Mortgage Amount $560,000 $455,000
Available Down Payment $100,000 $100,000
Home Purchase Price $660,000 $555,000

REFINANCING A MORTGAGE

A dual-income family with a combined annual income of $85,000.00. The current value of their home is $700,000. They have a remaining mortgage balance of $415,000 and lenders will refinance to a maximum of 80% LTV. The maximum amount available is: $560,000 minus the existing mortgage gives you $145,000 available in the equity of the home, provided you qualify to borrow it.

Up to December 31, 2017 After January 1 2018
Target Rate 3.34% 3.34%
Qualifying Rate 3.34% 5.34%
Maximum Amount Available to Borrow $560,000 $560,000
Remaining Mortgage Balance $415,000 $415,000
Equity Able to Qualify For $145,000 $40,000

Source (TD Canada Trust)

These guidelines have been in place since January 1, 2018 and we are starting to see the full impact of them for both buyers and those looking to refinance. Stats are showing that there is a slowdown in the real estate market, however there is also a heightened struggle for many buyers to now obtain approval under these new guidelines. It’s a difficult situation as the cry for affordable housing is still ongoing as the new guidelines may slow down the market but appear to further decrease the borrowing/buying power of individuals.
Keep in mind, this is just a brief refresher course on the B-20 guidelines. As always, if you have more questions or are looking for more information, we suggest that you reach out to your Dominion Lending Centres mortgage broker to discuss and get a full and detailed look at how it will impact you personally.

 

By Geoff Lee

8 Apr

Markets are changing. Where are rates headed?

General

Posted by: Ryan Dykstra

The recent data sure has changed the tone of rates in the coming months.

The prime rate – what variable rates are based on, while a few short weeks ago was expected to rise three times in the next 18 months now with the data on the slowing of the market and uncertainty in projects moving forward as expected, there are signs increases could be delayed until next spring.

The bond market- what fixed rates are based on, has dropped, which means rates (after the banks have hung on as much as possible ) should come down slightly.

What does his mean for borrowers? Let’s break it down per segment

Homebuyers – More affordability due to the recent dip in prices (Not London) – depending on price category anywhere from 10-30%. Remember, working with an unbiased mortgage professional we do a full look back upon closing to ensure the lowest cost of borrowing. London Market is still hot, many homes receiving multiple offers, and bidding wars. Be carefully you don’t too caught up in it. The market may be cooling sooner rather than later.

Home Sellers – Price sharp if you want to sell, or else no point in being on the market. We have seen a cooling in many markets across Ontario. London is still bucking this trend, for the time being. If you’re a Londoner and have been on the fence about selling now may be the time to capitalize, only problem is you may have to buy again.

Renewals Rejoice – Payment shock shall be reduced upon renewal. If you have been locked into an amazing rate on a 5yr mortgage, you won’t be seeing many sub 3% rates, but if rates go as expected you may make out OK.

Those carrying debt outside of a mortgage ex: credit cards, car payments, lines of credit – now is your time to see how much money moving that debt into a new restructured mortgage will improve your cash flow. It’s the most effective strategy for protecting your credit.

The most constant theme in everything above: The market is always changing, yesterday’s news is exactly that. Aligning yourself with the frontline experts who will help you with clarity in the ever-changing market. This is why while experts can give you the data on the current market – it’s always subject to change. The decisions a borrower makes is their responsibility to adapt to. If you have any questions, contact your local Dominion Lending Centres mortgage professional.

By Angela Calla

21 Mar

NUTS & BOLTS OF THE FEDERAL 2019 BUDGET | WHAT YOU REALLY NEED TO KNOW!

General

Posted by: Ryan Dykstra

On March 19, the Federal Government announced the official 2019 budget. One major topic on the discussion table (and one we were all holding our breath for) was the discussion of affordable housing in Canada. So just what happened on “Budget Day?” Here are the highlights of the 2019 Federal Budget:

MORTGAGE INDUSTRY RELATED:

CMHC First Time Home Buyers Incentive Plan

-This would give first time home buyers the ability to share the cost of buying a home with CMHC
-For existing homes – the incentive would provide up to 5% (funding/equity sharing) of the PURCHASE PRICE
-For newly constructed homes the incentive would provide up to 10% (funding/equity sharing) of the PURCHASE PRICE
-Funding/Equity sharing means that CMHC would cover a percentage of the purchase price

Example:

  • 400K purchase price, 5% down payment (20K), AND 5% CHMC shared equity mortgage (20K), the size of the insured mortgage would be reduced from 380K down to 360K, which would lower the monthly payment amount for the first time home buyer

To qualify for the program:

  • 120K max household income
  • Cannot borrow more than 4x their annual household income – making max purchase price approx. 505K
  • 100k household income would mean max 400K mortgage in order to use this program.

HOME BUYERS PLAN RRSP INCREASE

An increase of the previous $25,000 for RRSP withdrawal amount through the Home Buyers Plan to $35,000
These were the only two key changes that came out of the Federal Budget (so far). It provides minimal assistance for First Time Home Buyers, especially in a market like Vancouver and the Fraser Valley, who have home prices well above the 505k purchase price limit. However, it could provide assistance to those looking to purchase condos or townhomes ore in more rural areas. One area that will remain the same for the mortgage industry is the continued B-20 stress testing measures (which have recently come under fire)

The predicted start time is Fall 2019 for these guidelines. We will keep you updated on any new additions or changes as the information becomes available. If you have any mortgage related questions, contact a Dominion Lending Centres mortgage professional near you.

Geoff Lee

GEOFF LEE

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

11 Feb

First Time Homebuyers!

General

Posted by: Ryan Dykstra

Your First Home. What a THRILLING thing that is to think about!! One of the best parts about our job is helping individuals purchase their first home. We know that the process can seem daunting at first, but we have an in-depth understanding and knowledge of what steps are required to make the process go smoothly. Follow these and you will be turning the key into your new home before you know it.

1. Find a Fantastic Mortgage Broker
Finding a mortgage broker who can help with your pre-approval process can allow you to determine the price point of home you can really afford. Finding a mortgage broker right off the bat can also give you an advantage over working with your bank:

  • Mortgage Brokers work for you, not the bank or lender
  • They have access to multiple lenders and are not limited to one single product
  • They are an expert in the field. They focus on mortgages and mortgages alone!

2. Get Comfortable With The Numbers
There are two numbers that all first-time homebuyers should keep in mind: 39 and 44. These two numbers can help you budget and determine what you can truly afford when looking to purchase a home. Why 39 and 44? Here’s why:

  • A maximum of 39% of your total income can go towards your housing costs. This will cover your mortgage payment, property tax payment, heating costs, and strata fees.
  • A maximum of 44% of your total income can go towards your housing costs and total debt payments. This will include ALL housing costs and all debt repayments (credit cards, car loans, student loans, etc.)

Now, here are a few other key numbers that can help you in your house hunting:

3. Know What Your Down Payment Needs to Be
You know the numbers, now let’s look at what you need to know about the down payment itself. First, if you have less than 20% down payment your mortgage will be insured and have insurance premiums added to your mortgage. If you are considering putting the minimum down, that would be 5% if the property is worth $500,000 or less. A down payment of 10% is required for any amount over $500,000. Here’s a quick example of what this looks like:

Purchase Price of $600,000

5% of $500,000                                   $25,000

10% of $100,000                                             $10,000

Total Down Payment:                                   $35,000

4. Take Advantage of The RRSP Home Buyers Plan
The Canadian government’s Home Buyers’ Plan (HBP) allows for first time home buyers to borrow up to $25,000 from you RRSP for a d own payment, tax-free! You are able to combine this with your partner if you are both first time home buyers you can both access the $25,000 from your RRSP for a combined total of $50,000. Certain qualifications do apply for you to use this plan, we have laid them out here for you to review.

5. Don’t Forget About the Closing Costs!
This is one so many people overlook! Closing costs are something that can add up quickly when you are purchasing a home. Here is an approximate breakdown of the funds you will need:

  • Legal Costs: $1000
  • Title Insurance: $200
  • Appraisal: $350
  • Property Transfer Tax: Pending on purchase price

An additional few facts on property tax for you to consider:

This is an approximation of what your closing costs may be, but it is always good to budget for them beforehand.

6. Have your Documents Ready to Roll
Mortgages = paperwork! There are a number of documents that you will need to have to give to your mortgage broker. This will vary depending on your employment situation and where your down payment is coming from, but here is a general list you can follow:

  • Most Recent paystub
  • Letter of Employment
  • NOA’s (2 years)
  • T4’s (2 years)
  • Down payment verification—up to 3 months of bank statements
  • Contract of Purchase and Sale (Your realtor will provide this)
  • Property Disclosure Statement (Realtor will provide)
  • if you are self-employed you may also have to show:
    o T1 Generals
    o Articles of Incorporation
    o Financial Statements

7. Start Working on Your Credit Score
Yes, your credit score does directly impact your ability to get a mortgage. Lender’s want to see that you can responsibly manage credit and debt repayment before loaning you a large sum of money to purchase a home. Your credit score will be a determining factor in the terms and rate associated with your mortgage.

Just what impacts your credit score? Good question! Here are a few things:

  • Late payments will lower your score
  • Collections, judgements, consumer proposals, bankruptcy this will lower your score
  • Exceeded limits on credit cards
  • Ideally, you will be able to show a minimum of 2 active and current trade lines
  • The longer your trade line is, the better increase in your score!
  • Lenders also like to see a minimum of $2,000 limit on your credit cards.

Understanding and using this knowledge can help make your first home buying experience a great one! Once you have gone through the pre-approval process with a mortgage broker the fun part begins! Upon you receiving your preapproval, you can begin the house hunting. From there, you can put an offer on your dream home (yay!) Once your offer is accepted, we go through the mortgage process with you and then it’s moving day for you!

This is an exciting time for first time homebuyers—we enjoy getting to help our clients go from start to finish and helping them get the keys to their first ever home. If you have questions or are looking to find out just how much you will qualify for you can check out our mortgage calculator OR you can reach out to a Dominion Lending Centres mortgage professional directly!

Thank you to:

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

11 Feb

Renewing your mortgage to save you money!

General

Posted by: Ryan Dykstra

If you have a mortgage, chances are unless you win a lottery (cha-ching $$$) you’ll be doing a mortgage renewal when your current term has finished.

While most Canadians spend a lot of time, and expend a lot of effort, in shopping for an initial mortgage, the same is generally not the case when looking at mortgage renewals.

So what is a mortgage renewal?

Mortgages are amortized* over a set term* which can vary from 1-10 years.

About 6 months before the end of your term, your current lender will suddenly become your “Best Friend” showering you with attention and trying to entice you with early renewal offers… Please, please, please Mortgage borrower, sign here on the dotted line to renew… it’s sooo easy!!

You have 3 options

  1. Sign and send back as is (don’t do it, really I mean it… don’t do it!!)
  2. Check the market to make sure you are getting the best rate and renegotiate with your current lender

Talk to your friendly neighbourhood Dominion Lending Centres Mortgage Professional and together we can discuss the best options available for your situation.

Lenders know that 80% of people will sign their renewal forms, because it’s easy. Banks & Lenders are a business and as such they want to make the highest profits to keep their shareholders happy. As an educated consumer, you need to take the time to ensure you are being offered the best possible rate & terms you can get. Remember all those hours of research you did regarding lenders and mortgage rates when you were buying your first home?

Yes, signing the renewal document is easy, however, it’s in your best interest to take a more proactive approach. Money in the lenders pocket comes directly out of your pocket… so it’s time to get to work!

5 steps to save you money on your mortgage renewal

  1. Receive the renewal offer from your current mortgage lender and examine immediately, which gives you enough time to make an informed decision.
  2. Do your research via the internet and phone calls to find out about current rates.
  3. Phone your current lender and negotiate!
  4. If your lender will not offer you a better rate then it’s time to move your mortgage. YES, you will have to complete a mortgage application and gather documentation, just like you did for your original mortgage.
  5. Take a look at your budget and see if you can increase the amount of your mortgage payments above the mandatory payments and save money by paying off your mortgage quicker.

Your mortgage is one of your biggest expenses. For this reason, it is imperative to find the best interest rates and mortgage terms you possibly can.
As you can tell there is lots to discuss about mortgage renewals.

To save money, call a DLC mortgage broker to help you shop your mortgage around at renewal time.

Thank you to:

Kelly Hudson
Dominion Lending Centres – Accredited Mortgage Professional
Kelly is part of DLC Canadian Mortgage Experts based in Richmond, BC.

More from Kelly can be found here

13 Nov

ADVICE AND OPTIONS MEAN YOU’RE IN CONTROL

General

Posted by: Ryan Dykstra


Today, you and your spouse go looking for a new home. You’re excited because after years of scrimping and saving, you can finally afford your own place.

You’ve engaged a realtor and he’s called you to say that he’s found your new home. You visit the property and while its not perfect, your realtor insists that this is the home for you. He says there’s nothing else available that’s better suited and urges you to make an offer. He mentions at one point that he’s actually the owner of the property he’s showed you. You make an offer at the price he suggests and, hey presto, the offer is accepted!

You move in at the end of the month, happy that you’ve at least got a roof over your head.

It all sounds pretty unbelievable, doesn’t it? You can’t really imagine doing that, can you?

Let’s look at a similar scenario; one where you make a very similar choice.

A month or two earlier, you casually mention to your mum and dad that you’re going to start looking for a home. They’re both pleased and proud – they ask about your mortgage financing – and recommend you go see their account manager at Big Blue Blank.

Like most Canadians, you prefer going to the dentist over applying for credit, so after you meet with Cal from Big Blue, you’re pleased and relieved when he calls you later that day to say you’ve been pre approved for financing at a fixed rate. He’s even guaranteed the rate for 90 days! When you end up buying that not so perfect home, the mortgage is in place in a blink of an eye.

This time, the whole scenario is way more familiar, isn’t it? Why is the second scenario any more acceptable than the first?

A Mortgage Brokers’ value proposition is based upon the ability to offer independent advice about multiple products provided by multiple lending partners.

How we demonstrate that proposition is by providing both advice and options; advice on not only obtaining the right financing, but also repayment strategies and strategies to handle a changing interested rate environment.

By combining options on rates, terms, repayment privileges and to minimize penalties, we provide you with the one thing you didn’t get in either of the two scenarios – informed choice.

Dealing with a broker, any broker, gives each of us back something we are always looking for; control.

As always, if you have any questions or need help contact a Dominion Lending Centres mortgage specialist.

Jonathan Barlow
Dominion Lending Centres – Mortgage Professional
Jonathan is part of DLC A Better Way based in Surrey, BC.

3 Nov

The New Normal

General

Posted by: Ryan Dykstra

THE NEW NORMAL

’Tis the season… this was no surprise here! The latest round of mortgage guidelines has been announced by OSFI, or Office of the Superintendent of Financial Institutions. As of January 1, 2018, all conventional or uninsured mortgages will have to qualify at the Bank of Canada 5-year fixed rate or the contractual rate + 2%, whatever is greater.
What does this mean? Nothing for anyone wanting to renew or buy real estate with less than 20% down.
But anyone wanting to access their equity might just have to consider a slightly lower amount. And those wanting to purchase real estate with 20%+ down may need to adjust their expectations or relocate their search area.
Regardless of your scenario, there will still be options to exercise.
Next question on many people’s minds is how this will affect prices. Based historical data, I predict that there will be very little decrease in prices. Most people thought the ‘bubble’ was going to explode. Most comments were, “It just has to, how can prices continue to increase?” Well guess what… prices have continued to increase. Some market segments will experience a slight softening, but nothing drastic.
Here is a list of changes issued by OSFI since 2006. Did any of them bring prices down?

2006
Maximum amortization 40 years
100% financing, 0% down payment

2008
Maximum amortization 35 years
Maximum 95% financing, minimum 5% down payment required

2011
Maximum amortization 30 years
Refinance maximum 85% of the market value

2012
Maximum amortization 25 years
Refinance maximum 80% of the market value
If mortgage insurance is required, then the maximum purchase price of the owner-occupied home is $1,000,000

2015
Minimum down payment – 5% of the first $500,000 and 10% on the portion remaining

2016
Qualification rate increases to Bank of Canada benchmark rate for all insurable files (less than 20% down)

2017
Conventional (20% down or greater) stress test increases to contract rate plus 200 basis points (2%) or the Bank of Canada benchmark rate, whatever is greater

2018
What will happen in 2018?

There is no need to slam your fist on the panic button. This is simply the new normal for mortgage finance consumers. The sun will still rise in the east and set in the west. The earth will continue to rotate in a counterclockwise direction. People will still buy and sell real estate. Those consumers with available equity will still have access to it and borrowers will still renew existing mortgages. If you are receiving or buying into “the world is ending” type information, please look away… it’s wrong and misleading.
Nothing changes.
If you are worried about things you cannot control, stop it! If you are going to put any energy into something, I would recommend building a bulletproof personal borrowing profile. More than ever it’s vitally important to have AAA credit, minimal-to-zero consumer debt and strong reliable income and savings. If you start with that, I can assure you everything will be OK!
If you have any plans to become an active mortgage consumer, start looking at your options now as some lenders will adopt the new rules before January 1, 2018. If you have any questions, feel free to contact a Dominion Lending Centres mortgage specialist.

Michael Hallett
Dominion Lending Centres – Accredited Mortgage Professional
Michael is part of DLC Producers West Financial based in Coquitlam, BC.

26 Oct

Understanding Credit Scores

General

Posted by: Ryan Dykstra

Many Canadians have heard the term credit score. However few know how it is used, even fewer understand how it is calculated. Your score provides lenders with a snapshot of your financial health and can range from 300-900. The higher your score the more likely you are to qualify with better rates and terms. First of all let’s understand how the score is calculated.

How a credit score calculated?

Calculated using information from your previous and current lending products. 35% payment history, 30% Capacity or utilization, 15% length of credit, 10% accumulation of debt (12-18 months), 10% the types of credit you have. So how do you better your credit score?

Bettering my credit score!

Improving your credit score can take 6-18 months depending on the situation. Steps to help improve your score can include paying down credit cards and lines of credit to less than 75% of available credit. Make all payments on time, even if it is only the minimum. Ensure the information on your credit report is correct, you can request a free report from Equifax or TransUnion through their websites. Be mindful of any new accounts you open, inquires against your credit may have a negative impact if there are numerous inquires. If you are shopping for credit do so in a relatively short period of time. What else negatively impacts credit scores?

Hurting my credit score!?

There are a few things that you can do that will negatively impact your credit score. Consistently being at or over the limit of your credit cards or line of credits. Missed payments, a single missed payment affect your score for 24 months. Closing credit cards, this seems counter intuitive however closing a credit card reduces capacity. Inquires, too many in a short time may indicate financial troubles. Type of credit, having more revolving debt than installment loans. What doesn’t affect my score? Income, debt servicing, employment or address.

Recent changes to mortgage qualifying laws are making it important to have a strong credit score. If you are struggling with your credit score, or want to review what I can do to assist you contact me here.

Thank you,

Ryan Dykstra