General Preeti Vakharia 1 May

6 APR 2019

HOW TO IMPROVE YOUR CREDIT SCORE

When applying for any sort of loan, one of the most important metrics a lender is going to look at is your credit score.

But what really is a credit score, who keeps track of it, and most importantly, how can you improve yours?

There are a few simple ways to keep your credit score in good shape.

First off, prioritize paying your bills on time. Missing payments on your credit cards, lines of credit and so on, can have a very negative impact on your score.

You can spend an entire lifetime building up for good credit. All it takes is one mistake to negatively impact you.”
Second, try to keep your credit cards at no more than 65% of their limit. This is the sweet spot that credit scorers are looking for.

Thirdly, you should avoid the “free credit score” services out there because they’re just looking to sell you credit, or sell your information to someone who does.

When you’re looking for credit, what they’re going to ask you is, ‘What are you looking for credit for?’ And you’re going to say, ‘Well, I’m looking to get a mortgage, or I’m looking to get a car loan.’ And then what they’re going to do is they’re going to sell your information to banks and mortgage brokers and people out there who are able to supply you with credit.

Instead, what you should do is go directly to the credit scoring companies. They’re required by law to give you your credit information directly, without affecting your score. TransUnion offers an online form, found here. Equifax has multiple types of credit reports you can order here.

You also want to try to limit the number of credit inquiries by different lenders. When you’re shopping around at different banks, the number of inquiries can add up as each bank makes an inquiry to see what they can offer you.

But as a mortgage broker, we have access to multiple lenders all at once.

You could effectively come see a mortgage broker, get one inquiry done, and that inquiry is good for 20 financial institutions, As opposed to having to go directly to every bank. If you have any questions, contact your local Dominion Lending Centres mortgage professional near you.

General Preeti Vakharia 1 May

ARE MORTGAGE TERMS MORE IMPORTANT THAN RATE?

Why are the terms more important than rate when it comes to a mortgage?

Simple. Seven out of 10 Canadians break their mortgages prior to the renewal date.
Taking the wrong mortgage when you could have qualified for a better one- is a costly mistake.

The biggest mistake anyone can make is they don’t think they need to make a change, or they’re the three-in 10 that won’t break a mortgage.

For those people I give you a short list of potential reasons why you might need to get out of a mortgage early.

1. Sale and purchase – maybe you get an offer you can’t refuse, either work or real estate related, maybe the zoning has changed, your neighbours or strata are unmanageable or maybe you want to grow your family
2. Take Equity out – get renovations done, help family members or buy another investment, pay CRA, or assessments on property
3. Pay off debt – maybe you are like the over 60% of Canadians living paycheque to paycheque and paying over 5% on credit cards or lines of credit. There are much more savings in interest and cash flow for you utilizing your equity.
4. Relationship changes – moving in together, divorce is at a 50% rate these days, kids (needing more space or need to move in together).
5. Health or life challenges – huge illness, unemployment or death of someone on title can be a burden enough.
6. Removing someone from title – a co-signer (3/10 homebuyers get help from a family member) or an ex-spouse.
7. Save money with a lower rate – the market is always changing. It may make sense to break early and go with a different term as the market changes.
8. Pay it off – maybe you won the lottery or got an inheritance.

Some of the above is not avoidable, but the one thing you totally can control is who you align yourself with when shopping for a mortgage. A Dominion Lending Centres mortgage broker will always be looking at all the factors involved in a mortgage without bias to help you make an educated decision on what best suits you.

Angela Calla

ANGELA CALLA

Dominion Lending Centres – Accredited Mortgage Professional