Ellie Beaulieu | Dominion Lending Centres

Fixed or Variable?

The Bank of Canada Qualifying Rate has decreased to 5.49%, effective Sunday June 5, 2011 at 11:59

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Fixed or Variable? Canadians see rates on the rise, but views on which mortgage to choose in today’s rate environment are split: CIBC Poll

Getting advice on your personal financial situation is the key to making the right mortgage decision for the long term

TORONTO, June 2, 2011 /CNW/ – Canadians are split in their views on whether a fixed rate or variable rate mortgage is the right way to go in the current rate environment, even as they anticipate higher interest rates over the next year, according to a recent CIBC/Harris Decima poll.

Key findings of the poll include:

39 per cent of respondents said they would choose a fixed mortgage if they had to choose between a fixed or variable mortgage today.
32 per cent said they would choose a variable rate mortgage.
One-quarter (25 per cent) were undecided as to which would be the better choice.

61 per cent of respondents believe interest rates will be higher a year from now, while 24 per cent believe that rates will remain the same over the next 12 months.
Only 3 per cent of respondents believe rates will be lower a year from now than they are today.

“The divergent opinions on whether to go fixed or variable underscores what our advisors see everyday in their meetings with clients – choosing the right mortgage depends on your personal financial situation, and there’s no single answer for everyone,” commented Colette Delaney, Senior Vice President, Mortgages, Lending & Insurance, CIBC Retail Markets.

While the poll revealed that Canadians believe rates are likely to increase in the next 12 months, Ms. Delaney advised homeowners to consider additional factors beyond interest rate predictions when making mortgage decisions. “You need to approach the fixed versus variable decision from the inside out, starting with your personal financial goals and working from there,” added Ms. Delaney. “Your mortgage is a major part of your overall financial plan, and your decisions should be based on how your mortgage fits with your long term financial goals, not on short term rate fluctuations.”

The poll results also highlight that views on choosing a fixed or variable mortgage can change depending on your stage of life. For example:

Among 25-34 year olds, who are more likely to be first time buyers or new homeowners, only 27 per cent would choose a variable mortgage
That climbs to 42 per cent among respondents 45-54 years of age, who are more likely to be near the end of their mortgage and have greater tolerance for rate changes within their mortgage payment

Ms. Delaney noted that homeowners can look at both a fixed and variable strategy over the life of their mortgage. “For most people, your mortgage is a long term proposition, so your strategy should look beyond your first term,” commented Ms. Delaney. “You may choose to start with a fixed mortgage when you buy your first home, then transition to a variable mortgage in later terms when you have improved your financial situation and paid down some of the principal.”

While homebuyers this Spring will need to make the fixed vs variable decision when they buy a new home, Ms. Delaney also encouraged existing mortgage holders to take a fresh look at their mortgage and evaluate their options to help reduce their balance faster.

Source~ CNW Group

Canadians are using the equity in their homes for renos and debt consolidation.

As the Canadian economy recovers, consumers are feeling more confident on using their home equity for home renovations and debt consolidation.

To read more here please click on the link from CBC~http://www.cbc.ca/news/business/story/2011/05/11/mortgage-data-caamp.html

5yr fixed as May 11th 2011 @ 3.74% ** Rates subject to change without notice. *Conditions apply.
Call today to see how you can qualify! Great service & the most competitive rates! 604-818-2581

New Mortgage Rules

New Mortgage Rules are fast approaching…Here are some changes to look for on March 18th 2011

Below are the new regulations:

~Maximum amortization is decreasing down from 35 years to 30 years.

~Maximum Equity Take out is decreasing from 90% to 85%.

~Government insurance backing on “home equity lines of credit”(HELOCs), has been removed.

FAQ’S

Q: Does the mortgage , either a purchase or refinance , have to close by March 18th ?

A: No, it has to be a firm contract and approved before March 18th, however it can close after.

Q: I have a pre-approval but I haven’t found a home before March 18th, how does this affect me?

A: it has to be a firm contract in place before the 18th, however it can close after the 18th.

Q: I have a 40 year amortization. At renewal will I get a 30 year amortization or 35 year?

A: You will get a 35 year amortization in most cases. **”Depending on the lenders underwriting guidelines at time of renewal.”

Q: I’m in a 35 year amortization and would like to refinance/debt consolidate my mortgage?

A: if we get it approved before March 18th 35 year will be available, after the 18th it will be 30 year.

Q: I’m thinking of porting my mortgage over to a new home purchase, what happens?

A: Each lender seems to have a different policy and/or on case by case scenario’s, if you are thinking of selling and porting your mortgage please let me know and I would be happy to assist you.

E&EO

Here is the link http://www.cbc.ca/news/business/story/2011/01/17/flaherty-mortgage-changes.html

Please feel free to contact me with any mortgage related questions you may have.

At your service 7 days week. 9am-10pm

604-818-2581

Source: Link~CBC

Personal Finance

Your credit rating

Rebuilding your tarnished name

It has taken a while, but you’ve learned your lesson. You’re really sure of it this time. No more trouble with creditors. No more getting into financial trouble.

Whether you’re about to be discharged from bankruptcy or you’re emerging from a debt-management program worked out with a non-profit credit-counseling agency, there are steps you can take to get your credit rating back in shape:

Pay your bills in full and on time.

Contact your creditors if you are having trouble making payments.

Keep close tabs on the statements for your credit card and bank accounts. Make sure they’re correct.

Deal with companies you know and trust.

If you are going through the bankruptcy process for the first time, you will normally be automatically granted a discharge after nine months. You are no longer obliged to pay your unsecured creditors and you are free to try to start rebuilding your credit rating.

However, it can be a long road.

Before you took the drastic step of declaring bankruptcy, your credit rating was already about as low as it could get. As you emerge, it’ll still be down in the dumps. Your credit report will mention your bankruptcy for the next seven years — 14 years if it’s your second bankruptcy.

You will have to tell potential creditors that you declared bankruptcy. Now that you’ve been discharged, you can try to persuade potential lenders that you are now financially mature and will be able to repay any new debt that you incur. However, nobody has to give you a loan.

Staying on top of your credit report may help you avoid credit trouble in the first place. It’s good practice to get a copy of your credit report from all three credit-reporting agencies at least once a year and make sure it’s accurate.

There are three companies that maintain credit files on consumers. They are Equifax, Northern Credit Bureaus and Trans Union.

If you’ve ever applied for a credit card, they’ll have a file on you. The three companies have files on more than 20 million consumers. Whenever you apply for credit or try to rent an apartment, there’s a good chance someone’s going to check your file with one of those companies.

Kevin Leonard — an associate professor at the University of Toronto and an expert on the credit scoring industry — says there are errors on between 10 and 25 per cent of those files. Chances are, you don’t know if there’s a mistake on your file.

“Over 80 per cent of Canadians have never checked their score, and they should. Because some of the information they use to assess your credit rating could be wrong, and that could cost you a lot of money.”

Check your rating

Industry Canada says there’s no point hiring a company that claims it can restore your credit rating. They can do no more to change the information on your credit file than you can. If there are errors in your credit file, you have the right to make changes — or include a comment. And it won’t cost you anything.

If you do have a well-deserved black mark on your file, a credit bureau won’t remove it for seven years. A credit repair company can do nothing to persuade any of those credit- reporting companies to delete the fact you declared bankruptcy before the required time limit has expired.

If you’ve been granted a discharge from your bankruptcy, make sure you send a copy of the order to the credit-reporting agencies and keep all documents relating to your bankruptcy for reference by future lenders.

Perhaps you took action on your spiralling debt before you were forced to declare bankruptcy. You consulted somebody like Linda Wilke at the non-profit Credit Counselling Services of Atlantic Canada. Her job is to chart survival strategies for people drowning in debt. She reviews each client’s financial records and then presents options – from selling assets to trimming spending.

“We’ll do an eight-week planner — on this payday you can pay this and this and this, as well as set aside half your rent.”

For those in deep trouble, Wilke can help negotiate a debt-management program between the client and their creditors, which involves a ban on credit cards and a detailed long-term plan to repay all of the debt.

“This is a solution, not a Band-Aid. It’s not yet another consolidation loan. This is ‘you’re going to pay it back, every nickel. And you will get out of debt.’ It’s a hard road, but there’s an end to it. It doesn’t go on forever.”

As you emerge from the plan, you can apply for a credit card once again, but with a low initial limit — if you can persuade one of the banks to give you one. This will help re-establish a credit history.

It’s no surprise to people like economist Roger Sauvé that more Canadians than ever are getting into financial trouble. He says Canadians are piling up debt like never before.

“The average debt load per household is now over $90,000. The average household income — after accounting for inflation — increased by 12 per cent from 1990 to 2008. But average spending per household increased by 24 per cent over the same period.”

Of course, it’s always best to make sure you never get to the point where you have to consider steps like debt-management programs or bankruptcy. Understanding credit is a good way to start, as are following a few simple rules:

Don’t accept or use any form of credit until you understand and are comfortable with its terms and conditions, to avoid any misunderstandings between you and the credit issuer.

Don’t wait to report any unauthorized transactions on your account. Contact your credit issuer immediately if your bill includes items you did not buy.

Don’t go over the credit limit on your credit card.

Source: CBC-News

10 Easy ways to build credit history

Sept. 1st 2010

10 easy ways to build a credit history

by Gail Vaz-Oxlade, for Yahoo! Canada Finance

I am constantly astounded at the number of people I meet who are in a bind because they have no credit history and can’t borrow money. This is something we used to associate with older, widowed women who have been cared for by loving, controlling spouses. But that’s just part of the story. Not having a credit history isn’t the domain on slightly out-of-touch women; there are men out there who haven’t got a clue because their wives do EVERYTHING. And it isn’t the exclusive territory of our elders; there are young, professionals who haven’t bothered to establish their own credit identities.

Everyone needs to have the ability to borrow money. That’s true whether you’ve just found yourself in the new role of single parent without an emergency fund or you’re a young adult starting out.

1. Get a Secured Credit Card. The fastest, cheapest and easiest way to establish a credit history is with a secured credit card. Since there’s no risk to the lender because you’ve put up the cash to cover your balance, secured cards are great for new borrowers or people trying to re-establish credit after a bankruptcy.

Lenders usually want twice the credit card limit. So if you want a $500 credit limit, you’ll have to ante up $1,000. Once you’ve established your ability to manage the card – anywhere from six months to a year – you can ask for the security requirement to be dropped and your deposit returned.

2. Get a gas or department store card. Gas or department store credit cards are often easier to get and can be good ways to establish credit. You must pay your bills in full and on time because the interest rates on these cards are often astronomical. But as long as you don’t miss a payment – which you never will, right? – it makes no difference what the interest rate is. Use these cards wisely and they can be a great toe-hold.

3. Borrow for an RRSP. Borrowing money to contribute to an RRSP is a great way to establish a credit history. While the RRSP cannot officially be used as collateral for the loan, lenders know where to find their money so approvals come more easily and the interest rate won’t be horrendous. Make sure you only borrow as much as you can afford to repay in six months. How much you borrow doesn’t mean much; repaying the loan quickly without a misstep does. Don’t let anyone talk you into more. Once the six months are up, use the amount you were using to repay the loan as your month retirement savings contribution. Now you’re building up your assets, which will be good for your credit history too. 4. Get a co-signer. While I’m not a big proponent of signing on for other people’s debt, if you can find someone who loves you enough to put their credit history at risk for you, do it. Make sure the loan history is being reported in your name and not the co-signer’s.

5. Put up collateral. If you have someone a lender can sell to get back his money, you’re more likely to get credit. Collateral comes in all sorts of forms: from the car you’re buying to those GICs you’ve got stashed away, if you have something a lender values, you’re in the money.

Of course, getting credit is only the first step to building a credit history. How you use that credit will be the real test.

1. Pay all your bills on time. Yes, including your cell phone bill, since some cell providers report to the credit bureau. Setting up pre-authorized payments is a great way to ensure payments are made on time.

2. Avoid applying for credit too often. Since repeated requests for credit may be interpreted as a sign that you’re in trouble and need a way to cover your butt, this will adversely affect your credit score.

3. Charge regularly and pay off in full. Responsible on-going use of credit will produce a good credit rating. Just having your card sit in your wallet does nothing to add positively to your record.

4. Don’t over-expose yourself. Having multiple forms of credit with small balances can add up quickly and become unmanageable.

5. Don’t use credit to pay off credit. Taking cash advances on one card to make payments on another means you’re in over your head. Cut back on your spending, pay off your debt and get back to the business of using credit to keep your record active and healthy, not to spend money you haven’t yet earned.

http://ca.finance.yahoo.com/personal-finance/article/yfinance/1800/10-easy-ways-to-build-a-credit-history