Credit Score Myths for First Time Home Buyers

I continually meet new clients who don’t know their credit score and have never been educated on how their credit score is impacted by what they do.  Here is a reproduction of a recent article on credit scoring…I hear these often!

4 credit   score myths busted

Your credit score is a three-digit number ranging from 300-900 that tells future lenders how risky it is to lend you money based on your   history of making debt payments.
There are many misconceptions about what it takes to keep your score high.  Henrietta Ross, the CEO of the Canadian Association of Credit (CACCS) to help us sort fact from fiction:

Myth 1:   You must use major credit cards to build a good score.

Truth: If you’re unable to obtain a major credit card, there are other ways to build your credit history. Making regular payments on installment loans such as a car lease can positively affect your score, as do department-store cards and secure credit cards, which require a cash deposit in the amount of the credit   limit.

Myth 2:   You can’t make up for mistakes such as late payments.

Truth: It   takes time, but your credit will become positive as you build consistency with timely payments, Ross says. How much time it will take depends on a   number of factors, including how long the ‘late payment’ has been on your   record and how long you’ve had the debt.

Myth 3:   Paying cash boosts your score.

Truth:   You need to use credit in order to demonstrate your ability to make payments.  Using credit at least once every 30 days and making payments on time will keep you in good standing, says Ross.

Myth 4: I will not qualify for a mortgage if I’ve had a poor credit score.

Truth:   Lenders look at your entire financial picture, including your assets, available cash flow, and debt-to-income ratio. They’ll also review your housing expense-to-income ratio, which is a comparison of your expected   monthly mortgage payment with your gross monthly income.

If you are arranging a new mortgage and don’t know your credit score, please contact me, education is provided for free!

Source: News Canada

 

First Time Home Buyer Angst in Winnipeg

First Time Home Buyer Angst in Winnipeg

 

 

 

 

 

 

 

 

 

So you want to buy a new home?

Here are some important considerations when you enter the housing market in Winnipeg:

1)   You will face competitive offers. No matter how much you say you won’t bid large or write unconditional offers, many still do. The supply of homes in the first time home buyer range up to $250,000 are in demand so be prepared. No matter how much you prepare, when you are out there looking and have missed out on offers on other homes all logic and rationale will go out the window unless you are very patient.  Having the right realtor is something that you have control over so take the time in the selection.  Here are some great questions you can ask your realtor.

2)   Land Transfer Tax, the hidden surprise. Imagine buying your first home for $250,000 only to find out when you meet with the lawyer a week before your possesion date that you need $2720. for land transfer tax. This money goes directly to the Province of Manitoba to transfer the title from one name(s) to another. If this seems like a bit of a tax grab, you are right!

3)   While we are on taxes, in 2012 the Province of Manitoba introduced provincial sales tax on any mortgage default insurance premium. On a $250,000 home with a 5% down payment you can expect to pay $452.38 in sales tax. So first time buyers, the province is your pocket for $3172.38 and you haven’t even moved in yet. We continue to be one of the most heavily taxed provinces when it comes to purchasing a home, how are you feeling now?

4)   Property Disclosure Statements.  If you don’t feel that you need to know more about the property, here is an example of a home owner in Winnipeg who had a major surprise.  This happened on Christie Road in Winnipeg so it can happen anywhere.  Here is an example of a homeowner in Saskatoon who was able to legally go after losses relating to a basement that had water.  The Property Disclosure Statements were brought in to protect would be homeowners on any potential known problems with a home.

In the end, get professional well qualified advice to help make your first home buying experience the best possible.

 

Cancer & Financial Literacy

As the leaves change color, October weather teases us with the last taste of summer or abruptly knocks us in the gut to remind us of the changing seasons, life sometimes treats us exactly the same way.

Cancer and financial literacy really don’t have much in common, in fact one is all to prevalent in our lives while the other needs to be more prevalent.

After watching NFL football on Monday night, there was the common pink theme among both teams.  If two teams battling each other so violently can come together on one common ground, surely I can make a small difference. As I sat pondering my blog update next day, I had 4 cards to be signed and delivered to clients.  Normally I would send a gift card of some sort to accompany the card as a token of my appreciation.  Then it hit me like a thundering tackle in a football game, I am going Pink for October.  With every funded mortgage during the month, a donation will be made to the Canadian Cancer Society.  These clients will receive an acknowledgement in their honour.

November is Financial Literacy Month.  In preparation for financial literacy month, there a couple of contests open for individuals to enter.  The first is a contest eligible for youth ages 13 to 19.  It’s an easy contest to enter all you need to do is create a You Tube video and tell everyone why you are reaching for a financial goal.

In addition there is another contest open for post secondary students who could win up to $2500 for creating a 2 to 4 minute video.  Let’s some youth creativity to come up with some winners in Winnipeg.

In the spirit of financial literacy, I will be providing tips and tools through my Facebook page, twitter and Google+.  All you need to do is click on one of these links to get “hooked” up with all this timely info.  For every Winnipeg like on this facebook page during the month of October, I will donate an additional $2.  I’m starting at 55 so the rest is up to you.

Cancer and Financial Literacy, let’s kick some butt on both of these fronts.

 

Home Renovations Blog Week 6

After 6 weeks of renovations we have a functional kitchen, dining room and living room. The challenge now is get to the final items which need to be done (backsplash, stairs, and doors painted) Baseboards and casings are now complete with the front doors painted. Home Depot has an interesting product which allows you to insert a window without replacing your whole door. These inserts can be purchased in various styles, we decided to go with blinds inside the window to match the patio doors at the back of the house. These inserts come in a standard size of 22″ x 36″ and there are several varieties of looks.

We also purchased and installed the Delta Touch faucet.  No need to turn the taps, just touch the tap anywhere and it will turn on and off.  With messy hands this is really nice to work with.

The other interesting product we purchased is a table which will expand from 60″ to 132″.  There are 3 table leaves which can be added to create 4 different sizes depending on the size of your social or family gathering.  We purchased this from Dufresne Furniture and love the way this table can expand.

Here is the latest video and as our friends say, our home has a grown up look now.

Home Renovations Blog Week 4

After taking another week of holidays we completed the painting and flooring. The baseboards and painting on stairs remains before we can complete the flooring in that location. We had the unlucky 3 surprises this week. After measuring for the countertop we were told that our install date for the counter would be Nov 2, a far cry from our expected date of early August. After some great work by Floform to cut the quartz differently our order was fit with the remaining slab they had. We are extremely grateful for their efforts as we gave our sink and counter top to Restore (Habitat for Humanity). The Restore gives a great option to sending old items to the landfill.  The second surprise this week was a patio door that did not fit.  My wife calls this my $200 mistake as I had indicated it was 2×4 frame not 2×6 frame.  Home Depot accepted the return subject to the $200 restocking fee.  The 3rd surprise was a broken pendant light.  No biggie here, the glass was reordered and will arrive in 3 weeks.

We are back to work this week so Week 4 will see some progress but not as much as the last 3 weeks.  A liveable kitchen is the goal by August, we are almost there!

 

The Housing Market

CBC has weighed in on the Housing Market bubble debate now. Some excellent points for home owners and would be homeowners are in the discussion. If any of this is important to you, please contact me anytime and we can discuss your situation.

Daryl Harris, AMP

Accredited Mortgage Professional

204-928-7707

darylh@onelinkmortgage.com

The Meaning of Home

Every once in a while you find a story that touches your heart.  As a mortgage broker we get caught up in the day to day activity of mortgages, not homes.  As I heard this story, it brought home (no pun intended) the vision of why I am in this business.

At  CAAMP’s recent symposium in Winnipeg, Genworth talked about the contest they run called “The Meaning of Home” in conjunction with Habitat for Humanity.  Every year students in Grade 4 to 6 are granted entries in the contest whereby they complete a story about “The Meaning of Home”.  We take a lot for granted in our lives but this story really hit a chord on what a difference we can have in people’s lives.  Here’s the story:

Edie, Grade 4 Calgary, AB

Hi! My name is Edie.

I was born in Ethiopia and lived there until I was 7. In Ethiopia you do not have much food, water, clothes or shelter. Every day I would walk to the river and stand at the edge getting water in my bucket. Then I would walk all the way home with the bucket on my head so I could use the water to wash clothes, faces, dishes and give water to plants. At the end of the day I would use the water to make dinner. We would all sit together and have a great time! I did not go to school, only my brother did. In Ethiopia most girls stay at home and let their brothers go to school. There was a lot of love in my family but I was having a hard life.
My Birth Mom told me that she was sending me to a place where they would take care of me better. When I was at the place, Mom adopted me and brought me to Canada to live a better life. Now I am in a perfect school with friends. I am in grade four and I have the best education I could possibly imagine. Water comes out of a tap and I know it is clean and safe. I am having a great life and I never want to leave it because of all the love everyone is giving me.

With all that I have been through, home is different to me than to a lot of other kids. Home means a person, place or thing that makes you feel good when you are around them. It is a place were people love you and you love them back. Home means a person you can cry on when you are down. Home means a person you can tell secrets to. Home means a person you can jump up and down with when you are exited. Sometimes things in life can be hard but having a good home can make a difference.

Home means fun, love and care!

This story kinds of puts things in perspective for all of us, for that I thank you Edie.

If you are a teacher and would like to involve your students in this activity, please follow this link.  http://www.genworth.ca/contest/teacher.html

10 year mortgage rates, understanding the odds in your gamble

Since interest rates are at historic lows many consumers are asking questions about 10 year mortgage rates.  This short video gives you an understanding of what you need to understand to ensure you get the best odds on your bet, a 10 year mortgage is like placing a bet.

Here are few other keys points about 10 year mortgages:

1)  After the first 5 years of a 10 year mortgage, Canadian law states that the maximum penalty is 3 months interest payment and not Interest Rate Differential (IRD) like 1 – 5 year mortgages.

2)  Before you commit, have an Accredited Mortgage Professional assist you in the calculation in the video.  This will help you understand what your break even interest rate is in 5 years time.

3)  10 year mortgage rates are not very competitive in today’s environment, a mortgage broker can be a huge advantage for you, your bank or credit union may not be able to be very competitive.

 

 

 

 

 

Similar topics:  Understanding Mortgage Rates 

10 year mortgage rates

10 year mortgage rates

10 year mortgage rates

10 year mortgage rates

10 year mortgage rates
10 year mortgage rates

 

Happy New Year 2012

It’s the time of the year where everyone has made New Years resolutions and set goals for 2012.  As Canadians we have been fortunate in 2011 with our economy when other parts of the world like Europe and USA have faltered.  We must be more diligent and focused in reducing high interest debt (personal loans, lines of credit and more notably credit card debt).

If you own a home and have a mortgage you will want to check out this video titled New Years Mortgage Strategies to make the most out of your financial position in 2012.

All the best in 2012 for your goals, remember the difference between a dream and a goal is taking action, I would be delighted to help you with that.

Please email/text/tweet/message me if you would like a budgeting tool or a form to increase your mortgage payments.

 

The Value of Good Mortgage Advice

A recent situation arose where a client was preapproved for a new home purchase by their bank.  Great, right?, not necessarily, they owned an existing home and were told by the bank representative that they should sell their home first and then purchase a new one.  They were moving down in price so the client assumed this was a no brainer.  The bank representative did not do the diligence in exploring their current situation.

They proceed to sell their home, agree on a price and then go out looking for a home.  They would have some equity to purchase a home however, were hoping to buy a new home with 5% down payment as pre approved by the bank.  The only catch in this situation is that in Canada an insurer(a 2nd step in the approval) needs to approve the mortgage with less than a 20% down payment.  The clients were not made aware of this and their application was not approved with 5% down payment.  Instead the insurer requested 10% down payment with some conditions that the client had to meet before the bank could get it approved.  The clients are now scrambling to look at options so they can own a home rather than rent.

The moral of this story is as follows:

1)  Get a second opinion after meeting with your bank.  The experience and knowledge of the bank representative may not be as good as you think.  Ask about their experience in mortgages and how many times they have handled a situation like yours.  A mortgage broker with the Accredited Mortgage Professional (AMP) designation is committed to ongoing education and professional development, a great first step in identifying someone who is committed to the consumer.

2)  Speak to your realtor about your options.  A professional realtor will review the options with you and team up with your mortgage advisor to assist you in a smooth transaction.  Making an offer, “subject to sale of your existing home”, may offer you the necessary security to ensure your new home and fianancing is approved before you sell your existing home.

Good advice from a team of professionals acting in your best interest is the key.