Yes we’re in the busy season! Lots of shopping, cookies to bake, parties to plan for and to attend. For many though, pesky debt responsibilities can dampen their planning and holiday enjoyment. Others may not worry about their debts, thinking they can always get their financial house in order after the holidays.

But if you’re concerned about your debt obligations, consider adding one more task to your pre-holiday season to-do list! See if you can use your home equity to consolidate your high-interest debt into a new or existing mortgage. You’ll lower your payments, save on interest and (more…)

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“Will it keep you awake at night? Will you constantly be checking to see what rates doing? Do you think you might panic and lock in if rates are starting to rise?”

All of the above are questions that I ask a client before I give them my perspective on whether a fixed or a variable (adjustable) rate mortgage is right for them. I ask them these questions because I think that choosing between the two options is less of a question of which will save you more money, but more a question of a persons risk tolerance. (more…)

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That’s a good question. A conventional mortgage is one where the borrower is willing to put down at least 25% of the properties value as a down payment. That means if they are buying a $400000 house, they are borrowing only $300000. A high ratio insured mortgage is one where the borrower puts up less than 25% of the value of the property as a down payment. In this case the mortgage must be insured either privately or through the Canadian Mortgage and Housing Corporation, Genworth Financial, or AIG United Guarantee. If the mortgage is insured, the borrower is responsible for an additional insurance premium, this premium is paid to the mortgage insurer. If someone was to default on their mortgage, the idea is that the insurer would repay the costs to the lender. That doesn’t mean you can default on your loan, it just means the bank is covered. If you do fail to repay your mortgage it will be reflected on your credit and you are very unlikely to get a mortgage again for a very long time.

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In the last post we talked about how the rate a client receives is generally based on how much of a risk they are to lend money to. Part of that risk analysis has to do with an individuals credit score.

Credit scores typically range from about 350 to 850. 850 represents a client who is extremely likely to pay back any loans they take out in full, a 350 score represents somebody who is highly likely to default on their loans. Most people fall into the high 600′s low 700′s range.

Your credit score is incredibly important in determining whether or not a lender will lend you money. It is based on your past credit history and is usually a pretty good predictor of a clients risk. To keep the score high you should only apply for credit when you need it, and make all of your monthly payments on time. If you don’t, it will take approximately seven year for your credit to recover.

To find out your credit score is simple, and should be done about once a year. Go to equifax.ca and request the Score Power Credit Report. It will cost you about $25, but will give you a pretty good indication of where you stand in the eyes of a lender.

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