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Bernadette Laxamana’s Mortgage Update – Tagalog Version
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Aug 25
Your Credit Score:Know it. Protect it.
In today’s blog I’m going to share with you some more tips about what factors determine your credit score in Canada and how to protect it. This is part two of a two-part series.
As a review from part one of this blog, here again are the five key characteristics or factors that determine your credit score in Canada.
- Payment history – 35% of your credit score
- Amount owing – 30% of your credit score
- Length of credit history – 15% of your credit score
- Inquiries – 10%
- Credit mix – 10%
I’m going to discuss the last two factors today.
4.Inquiries
Inquiries contribute approximately 10% of your credit score and includes the…
- number of recent inquiries
- amount of time since the previous inquiry
Credit score tips – Inquiries
- Do your rate shopping for a given loan within a focused period of time. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
- Re-establish your credit history if you have had problems. Opening new accounts responsibly and paying them off on time will raise your credit score in the long term.
- Note that it’s okay to request and check your own credit report. This won’t affect your credit score, as long as you order Equifax’s credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.
You can get a free copy of your credit report by calling Equifax at 1-800-465-7166 Mondays to Fridays between 8am-5pm EST.
5. Credit mix
Credit mix contributes approximately 10% of your credit score and includes the…
- Number of accounts and type of accounts
- Prescience, prevalence, and recent information on trades
Credit score tips – Credit mix
- Apply for and open new credit accounts only as needed. Don’t open accounts just to have a better credit mix – it probably won’t raise your score.
- Have credit cards – but manage them responsibly.
- In general, having credit cards and installment loans (and paying timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
- Note that closing an account doesn’t make it go away. A closed account will still show up on your credit report, and may be considered by the credit score.
Again just remember the phone number to contact Equifax is 1-800-465-7166. Please contact me if you need any clarification on anything about this blog. Thank you to Equifax for providing us with this information.
Thanks for reading!
We welcome your questions and feedback.
Bernadette Laxamana’s Mortgage Update – English Version
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Aug 18
Aug 18
Your Credit Score:Know it. Protect it.
In today’s blog I’m going to share with you some tips about what factors determine your credit score in Canada and how to protect it.
There are five key characteristics or factors that determine your credit score in Canada.
- Payment history – 35% of your credit score
- Amount owing – 30% of your credit score
- Length of credit history – 15% of your credit score
- Inquiries – 10%
- Credit mix – 10%
I’m going to discuss the first three factors today and the last two in part 2 of this blog.
1. Payment history
Payment history carries the most weight in determining your credit score.
The biggest contributors to your payment history data is…
- account payment information
- the presence of adverse public records or collection records
- severity of delinquency
- the amount past due on delinquent or collection accounts
- how recent a collection, adverse public record or past due event took place
- the number of past due items
Credit score tips – Payment history
- Pay your bills on time. If you cannot pay the balance in full, make sure you at least make the minimum payment by the due date. You can pay the rest of the balance after the due date.
- Delinquent payments and collections can have a major negative impact on your credit score. If you have a dispute about a bill or payment, pay it on time first, then dispute it afterwords.
- If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your credit score.
- Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.
- If you are having trouble making ends meet, contact your creditors or see a legitimate credit councilor. This won’t improve your score immediately, but if you can begin to manage your credit and pay on time, your score will improve over time.
2.Amount owing
Amount owing contributes to approximately 30% of your credit score and includes the following…
- All accounts
- Specific accounts
- Number of accounts with balances
- Utilization of some revolving credit lines
- Proportion of balance to original installment loan amount on certain types
Credit score tips – Amount owing
- Keep balances low on credit cards and other “revolving credit”. High outstanding debt can affect a score.
- Pay off debt rather than moving it around. The most effective way to improve your score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.
- Don’t close unused credit cards as a short term strategy to raise your credit score.
- Don’t open a number of new credit cards that you don’t need, just to increase your available credit. This approach could backfire and actually lower your credit score.
3.Length of credit history
Length of credit history contributes to approximately 15% of your credit score and consists of…
- Time since specific type of accounts were opened.
- Your average account age calculation.
Credit score tips – Length of credit history
- If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your credit score if you don’t have a lot of other credit information.
- Rapid account buildup can look risky if you are a new credit user and may be identified as a “seeker of credit”.
Click here for Part 2 of this blog.
Thanks for reading!
We welcome your questions and feedback.
Bernadette Laxamana’s Mortgage Update – English Version
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Jul 27
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Jul 27
METRO VANCOUVER – After decades of debate, Surrey has decided to permit homeowners to have one secondary suite in all single-family homes in the city, following an Ipsos Reid telephone poll in which 63 per cent of those surveyed supported the idea.
The move, which received unanimous approval at city council Monday night, brings Surrey’s secondary suite policy into line with that of most municipalities in Metro Vancouver. Delta is expected to go ahead with a similar policy.
Up until now, Surrey has allowed secondary suites only in predetermined zones in the city, mostly in Newton. Yet the city has its share of illegal suites, which are estimated to number as high as 19,000.
Surrey Coun. Judy Villeneuve, who chairs the city’s social planning committee, said the illegal suites have provided affordable housing in the city, as well as mortgage help for new homeowners.
Legalizing the suites, she said, will allow homeowners to offer accommodation to extended families or renters, while ensuring they provide parking spaces and pay their fair share for utilities and taxes.
Homes with secondary suites result in added costs to the city’s water, sewer, and garbage services.
“Hardly any rental housing has been built in Surrey in the past 15 years,” Villeneuve said. “Our goal is to is to provide lots of [different] housing so everyone can live … and have a roof over their heads.”
According to the Ipsos Reid poll, 63 per cent of 1,200 people polled in a random telephone survey said they would support the move, mainly because it would provide more rental housing, make home ownership more affordable and increase density in neighbourhoods without changing the area’s character.
But support varied according to location, with 65 per cent in favour in the Newton/Fleetwood area compared with just 57 per cent in south Surrey.
The main reasons for opposing the move are related to parking issues, general congestion/crowding, traffic congestion and concerns about equitable payment of property taxes and utility charges.
City staff recommended that council endorse the policy subject to conditions, which included prohibiting multiple suites in a house, requiring the registered owner of a home with a secondary suite to live on the premises and requiring homes to provide parking and pay appropriate utility fees to offset the added costs of city services.
The random telephone survey, conducted between June 28 and July 6, has a margin of error of 2.8 percentage points. A web-based survey, which polled more than 1,500 people on the city’s website from June 28 to July 1, found levels of support were lower, with 55 per cent in favour.
Jul 20
Jul 20
Bank of Canada (BoC) raised its key lending rate to 0.75%
The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 0.75 per cent. This means the Prime lending rate is moving up to 2.75% from 2.50%, resulting to an increase of $13 for every $100,000 mortgage. The next Bank of Canada interest rate meeting is on September 8.
The Bank’s reasons for raising the rates are:
- “The global economic recovery is proceeding but is not yet self-sustaining.”
- “Housing activity is declining markedly from high levels, consistent with the Bank’s view…”
- “The Bank now expects the economy to return to full capacity at the end of 2011, two quarters later than had been anticipated in April.”
- “Both total CPI and core inflation are expected to remain near 2 per cent throughout [2011].”
What does this mean to you? For clients holding variable rate mortgages especially those with prime minus, this means that your variable rate will remain stable for the next 12-18 months. The increases will not be dramatic. For clients holding prime plus zero or more, we need to renegotiate your mortgage to take advantage of deeper discounts. For clients who have fixed rate mortgages of less than 4% you are in a great spot right now, so hold on to that because those rates are not in the market anymore.
If you are holding a mortgage of 5% or more and are seriously considering saving money, I recommend switching to a variable rate mortgage because based on the Bank of Canada’s outlook, we don’t see variable mortgages moving up to 5% in the next two years, this gives us time to pay out the penalty, and pay off your mortgage faster. To illustrate we recently did a restructure for a client whose mortgage was over $500K. He was paying an interest rate of over 5.75% and had 37 years remaining on his mortgage. AFTER paying the penalty, we still saved him over $50,000 for the next 2 years and reduced his amortization by 5 years!
If your mortgage rate is 5% or over, you should seriously consider refinancing your mortgage to take advantage the current variable rates. This will: lower your payment, save you thousands of dollars and reduce your amortization by at least 5 years! Please contact us ASAP.
Please see the Bank of Canada Historic Rates below:
Bank of Canada Historic Rates
1991 to 2010
The Bank of Canada changed in rate set policy in November 2000 to set 8 times during the year that they would establish monetary policy to guide inflation within a band of 1-3%.This was done to prevent the hyper inflation experienced during the 1980 early 1990’s.
We welcome your questions and feedback.
Bernadette Laxamana’s Mortgage Update – English Version
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Jun 01
Bank of Canada (BoC) raised its key lending rate by 0.25 percentage points.
Today the Bank of Canada raised its key lending rate by 0.25% percentage points, which means lenders will be raising variable rate mortgages by 0.25%. Clients holding a variable rate mortgage will see a mortgage payment increase of roughly $12 for every $100,000 mortgage with 35 year amortization.
For clients who are considering fixing their mortgage and would like to know what the approximate mortgage payment would be, we have prepared a table below showing you what payments you should be expecting for every $100,000 mortgage.
Term Rate Monthly payment
3 years 3.85% $434
4 years 4.34% $463
5 years 4.49% $473
At Verico M&B Mortgage Solutions we have restructured most of our clients whose variable mortgages were at Prime plus levels and now they are enjoying significant savings because we have brought their rates down by as much as 1% to a Prime minus level. Therefore this latest rate increase will not affect them. If you are currently holding a Prime plus 0% or more, please contact us so we can restructure your variable mortgage as soon as possible.
If you are fortunate enough to hold a variable rate mortgage at a Prime minus level, I suggest we run a Variable Rate Strategy with you at your earliest convenience. This will translate in thousands of dollars in savings for you over the next 3 to 5 years. Remember this strategy is available only through our company and not from your lending institution so I suggest you act on it now and start saving your money today! It is definitely worth a call to find out what you’re options are because everyone’s situation is different and unique.
We hope you learned a lot from today’s blog and we welcome your questions and feedback.
Bernadette Laxamana’s Mortgage Update – English Version
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May 18
