25 Aug

Managing your Mortgage


Posted by: Jeff Parsons

Why is it important for you to have a mortgage manager? Reaching your financial goals is attainable!

There are some things to consider before securing your mortgage:
Is there a potential of you buying an investment property or a vacation home? Are you considering scaling up or downsizing? Do you think you might move or port your mortgage or retire within the next five years? All these scenarios come into play when setting up your mortgage.

If you had $500,000 cash to invest, how often would want your financial advisor to review your investments?

Why is it different when you are $500,000 in debt with your mortgage?

Why not have an active mortgage broker looking after your $500,000 debt?

Active financial advisors aim to grow your net worth by investing wisely.
Active Mortgage brokers will help you grow your net worth by reducing your debt and growing your asset base. You will cover only half of the prosperity equation without a mortgage broker.

Consider this: your bank’s main goal is to make money for the bank. This is understandable as they are in business to make money. As reported, banks make billions of dollars every quarter, in part, thanks to you. On the flip side, a mortgage brokers is an advocate for you and their main goal is to get you the best mortgage to meet your goals. This comes in many forms, not just the interest rate, although it is important there are other areas that could cost you more money in the long run.
An active mortgage broker can save you thousands of dollars over the life of your mortgage.
Most mortgages are set up on a five-year term. A lot can happen in five years.

Changes in life happen. You are forced to move, or you would like to move to a bigger home, down size, buy an investment home a recreational property, or take equity out to buy a business or perhaps retire.
Mortgage rules continually to change. What worked last year may not work this year. It is important to review your situation with your mortgage broker before making any major decisions with your current mortgage.
Being in the right mortgage may be the difference between being able to buy that investment property or recreational property. It may be the difference of paying a $3,000 penalty or an $18,000 penalty to close out you mortgage.

Remember, it is not getting a mortgage that is important, it is getting the right mortgage that will help you meet your future goals.
When it comes to your renewal time it is important to once again review your options with your mortgage broker.
Your current lender may not have the best rate or option for you at renewal time as there are many lenders and there are many options to choose from. At renewal time, you can change lenders with no penalty. Renewal time is also a good time to take extra equity out of your home to pay off debt, for investment purposes or to pay for that new kitchen you wanted.

I have called many clients well before their mortgage is due when I recognized it would save them thousands of dollars to refinance early. Moves like this help clients pay down their mortgage faster, provide extra cash flow for investments, and provide funds for renovations or a down payment on an investment property.
Having someone manage your mortgage can be a great benefit for you and your family.
If you currently do not have an active mortgage manager, a Dominion Lending Centres mortgage broker would be happy to become your mortgage manager.

Kevin Bay

Dominion Lending Centres – Accredited Mortgage Professional
Kevin is part of DLC Producers West Financial based in Langley, BC.

15 Aug

Secrets for building your credit


Posted by: Jeff Parsons

Over the years, I have come across all sorts of people who have had no idea what their credit score is. Some of them have declared to me that they have great credit only to find that they had poor credit scores or a number of late payments. I have also had people tell me that they had lousy credit only to find that they had a very respectable credit score. People do not know anything about credit and need an expert to help them to build their credit.
When you ask the two major credit reporting agencies, Equifax and Trans Union how they score credit, they give you a vague idea but no idea on how to quickly up your score.

Perhaps you have seen this pie chart that shows how they score different activities I have found out recently that people have higher scores that they had previously and this is due to more emphasis on what you owe now as opposed to your payment history.
Here are some things I have observed over my 12 years of being a mortgage broker.

1- Credit card balance. If you have a credit limit of $1,500 and your balance is at $1,450 you are losing 25-30 points. Having a balance of $0 or using less than 50% of the limit adds points. If you pay the minimum balance you may go over your limit. If you are over your credit limit by $1 you will lose 35 points !
How do you quickly get your score up in this situation? Call your credit card company and tell them that you have a large purchase coming up. Ask them to increase your limit to $2,500. They won’t give you a decision over the phone but often within a week you will receive notification that your balance has been increased. You now have an extra 25 points with one phone call. You can also ask them to lower your interest rate so that you can pay your balance down quicker. Most people don’t realize that credit card companies will do this. You can also move your credit card balance over from a high interest department store card at 26% to a lower interest bank card at 9.95%.

2- Types of credit used – credit agencies want to see proper usage of revolving credit ( i.e.: credit cards) and installment credit (i.e. car loans) . They also want to see that you have over $2,500 in available credit. You probably have a credit card but you may not have an installment loan showing on your credit report. You don’t have to buy a car to get this showing on your report. Consider getting a $1,000 RRSP loan from your bank. Why? Well, $1,000 is a substantial loan. Your bank or credit union will be more willing to lend you money for an RRSP that you may buy from them than they would lending you the money for a gambling junket to Vegas.
The RRSP loan is a win/win for you. Besides increasing your credit score and thickening your credit file you will get a tax refund at the end of the year which can be used towards your down payment. 90 days after you open your RRSP you can use the money towards your down payment under the Home Buyers Program up to a maximum of $25,000.

Credit history – don’t close the old credit card you got in university just because you aren’t using it.
Chances are that this card is still reporting month after month that you have credit with them and that the balance for that month is $0. Finally this brings me to my best tip for building credit.

Payment History – Recently I had a young client who wanted to renew his mortgage. When I obtained his credit report I was surprised to see that he had a 900 credit score. This is the highest score possible and usually it is reserved for older people with 20+ years of credit history. When I asked him how he managed this he told me that the only thing he does differently is that he checks his credit card balance every week and pays it off to $0. I knew that people who paid bi-weekly often had higher scores from having more payments showing in their history but this was the first time I had ever heard of someone paying weekly. I am not certain if it’s the number of payments, the fact that the balance is $0 so many more times or a combination of the two factors.
Recently, using these techniques I was able to raise a client’s credit score by 60 points in one month.

If you want to buy a home and you suspect your credit is weak, your first call should be to a Dominion Lending Centres mortgage broker. They can check and make suggestions to get your credit score up and to get you into a home a lot sooner than you could do this on your own.

David Cooke

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

14 Aug

The Role of a Mortgage Broker


Posted by: Jeff Parsons

Buying a home is a big step – a big, very exciting, potentially stressful step! How can you take the hassle out of the equation and keep your buying experience super positive? Easy… Surround yourself with a team of experienced professionals!

Many experienced realtors insist on starting your financing first, that’s where your Mortgage Broker comes in.

What is a Mortgage Broker? A Mortgage Broker is an expert in real estate loans that acts as a match-maker between home buyers looking for money and lenders with funds available to borrow. A broker will collect information from you about your employment, income, assets, loans and other financial obligations as well discuss your current budget, spending patterns and goals in order to get a thorough understanding of where you’re at and where you’d like to be. From here they assess the strengths and any weaknesses in your application and can advise on potential suitable financing options and any next steps you might need to take in preparing yourself for loan approval.

Talking with a Mortgage Broker before you start shopping is helpful for a number of reasons:

You’ll develop a well-founded expectation of the price range and payments that you can afford.
You’ll have a chance to address any potential gaps in your application for financing BEFORE you’re in a time crunch to meet deadlines for closing.
Sellers may take your offer more seriously when you tell them you’ve been pre-approved for your financing putting you in a better position to negotiate (price, possession date, inclusions, other terms, etc).
You and your Mortgage Broker will begin to compile your documentation so that your application is ready to go when you find the perfect home, leaving your mind free to start arranging furniture in your new place.

So why use a Mortgage Broker rather than your bank?

A Mortgage Broker has access to loans from a wide range of lenders. That means that you have more potential places to get approved, AND can take advantage of best products, top programs and lowest pricing!

A Mortgage Broker must complete a series of courses and pass the corresponding exams prior to obtaining a license to sell mortgages. In order to maintain that license a Broker must uphold the highest standards of moral, ethical, and professional conduct – including ongoing education and training.

A Mortgage Broker working with multiple lender options means that they truly SHOP for the best programs and rates for you based on comparisons and choices and don’t simply sell you the limited products they have to offer through a single bank source.

Mortgage Brokers work EXCLUSIVELY in mortgages so they are mortgage product specialists rather than banking generalists. Brokers deal with real estate transactions involving deadlines and conditions everyday as part of their job. They understand the urgency of meeting these commitments to ensure a successful transaction for everyone involved.

Learn more by contacting your Dominion Lending Centres mortgage professional today!

Mandy Reinhardt

Dominion Lending Centres – Accredited Mortgage Professional
Mandy is part of DLC A Better Way based in Medicine Hat, AB.