Make a plan and stick to it. You must be serious and committed to making changes in your lifestyle — changes that will bringfinancial peace of mind. Above all, restrict yourself to absolutely necessary purchases. Borrow wisely. The two most important questions to ask yourself: “can I afford it?” and “do I really need it?” As tempting as it is to cut up all of your plastic, you must maintain responsible credit card use — your new payment history will gradually rebuild a better credit rating for you.

Prompt payment of bills, especially of credit cards, is the surest way to repair your credit rating. As you have discovered, we leave “financial footprints” for all to see. Payment of our bills, both amount and timeliness, are tracked by credit rating agencies such as Equifax Canada and TransUnion of Canada.

Say no to grace periods when offered by credit card companies. It’s hard to resist such offers, and because your budget is tight, you naturally want to “legally” skip payments — but don’t do it. It’s a bad credit habit; only a financially strapped customer would fall for this, and you no longer want to send out that kind of message. Pay at least the minimum balance if you are really tight, but ideally you want to pay above that.

Always try to pay more than the minimum balance due on your credit cards. Not only does it polish your credit rating, but it also saves you a lot of money in interest, and makes a huge difference in your eventual goal of debt retirement. A key credit skill.

Keep your balances low. This is an important strategy, and one that will reflect well on your use of credit. You want to keep your balance way below the credit available to you.

Don’t send out financial distress signals. Avoid excessive inquiries for credit. Do not use credit from one company to pay off credit to another. The creation of multiple new accounts is another red flag that works against you.

Maintain and use between two to four cards — less that two and it takes longer to create a new payment history. More than four, and you look like you cannot manage your debt. Remember – responsible, steady, and reliable use of your cards is your first and best defense against a poor rating.

Try to keep your oldest most established credit card active. The longer your history is with a certain company, the better it is for your credit rating. This is your most important account. If the interest rate is excessive, contact the company and explain your situation to them. Let them know that you are serious, and eager to maintain them as a creditor. Their goal is to keep a reliable customer, so make that work for you.

Contact your creditors. Don’t hide your head in the sand, and hope for the best. Take action. Pick up the phone, and explain your situation. Be upfront and honest. Remain cooperative and calm. Not only will they appreciate your initiative, but also they will be willing to create a payment plan that works for you. By calling, you are showing them that you are a concerned low risk customer. And, by communicating, you will avoid the dreaded collection agency round – a real downer for your credit rating.

Slow and steady wins the race. You’ll be rewarded for responsible longtime credit handling. Be patient — the passage of time will earn back your good credit profile. Then, when you do need credit for a major purchase — such as a car or a house — it will be there for you. Once recovered, maintaining a good credit rating takes vigilance, but it’s worth the effort. You’ll be able to live and enjoy a financially stable life.

Mortgage Brokers are not tied to any one lender

A mortgage broker doesn’t need to be loyal to any particular lender, so they can provide independence and objectivity, as well as shop around for the best rate. 

If you’re unhappy with a particular lender or don’t like the package it puts together, the broker has the freedom to look elsewhere.

A mortgage broker’s main concern is that the customer gets the best rate and mortgage - not that the lender makes the most profit. 

There are sales and promotions in the mortgage world too.   A broker will know about these special offers, and whether or not they might work in your situation.  This is one area where a broker’s access to many lenders can definitely benefit the borrower. 

Mortgage brokers have working relationships not only with traditional lenders (”A” lenders) for traditional customers, but also work with “B” lenders, “C” lenders, and private lenders.  These non-traditional lenders will very often overlook the standard conditions required by “A” lenders, especially for individuals with a troubled credit history, or those who cannot provide standard income confirmation, or have inadequate down payments, etc.

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Our Kenora office has relocated to 227A First Street South. 

We’re right next door to Royal Lepage, Landry’s for Real Estate.

Kenora office hours are from 10:00AM till 3:00PM Monday thru Friday.

Appointments at your convenience.  Mornings, afternoons, evenings or weekends   

In addition to residential mortgages, the Kenora office also arranges

commercial mortgages and commercial leasing.

There are no fees for our regular residential mortgage services.

Try some different payment scenarios with our Mortgage Calculator 

Well, you may not uncover a financial windfall when you’re cleaning the garage this spring, but a little time and attention to the task of spring-cleaning your financial house can be very rewarding. This spring, dust away the cobwebs and take a hard look at your debt servicing costs.

Are you continuously carrying a large monthly balance on your credit card? Or are you making regular use of your overdraft protection at the bank? Worst of all, could it be that you’re carrying a balance on a highinterest department store card? Take some comfort in knowing that you’re not alone. However, this particular kind of financial clutter - ongoing, unsecured consumer debt - is both confusing and costly. Guess what? It’s time to spring-clean your debt!

Begin by making a quick list of any loans, credit cards or other unsecured debts. In addition, make a note of the interest rates charged on any outstanding balances. Finally, do a quick calculation of what you have paid in debt servicing costs this winter. Has the tax man sent you a bill? Don’t forget to include that debt in your spring-cleaning project.

Next, take a look at the going mortgage rates, and make an appointment with a mortgage professional. By rolling your other debt into a mortgage - either new or existing - you can reduce the number of payments you’re making each month, you can save big on interest charges, and you can improve your cash flow.

How much difference will it really make? Well it can be as good - or better - than finding the $5000 envelope of cash in your garage. Why? As an example, if you have a $160,000 mortgage at 6%, high interest credit cards and other loans of say $33,000; your total monthly payment could be $2,014.

Now if you took that $193,000 and added on an approximate $3,000 penalty to refinance your Mortgage, you may be able to potentially roll that $196,000 into a 4.95% mortgage (OAC, rates subject to change) that could reduce your overall monthly payment to $1,134. That’s a monthly savings of $880. Your monthly payment has been reduced, you’re saving on interest charges, and all of your high interest credit card debts are gone. Imagine if you funneled some of that cash flow back into your mortgage!

If you have equity in your home — preferably more than 25% equity - you may want to consider taking advantage of attractive mortgage rates and rid yourself of your financial clutter. Regardless of where you are in the life of your mortgage, talk to a mortgage professional who can analyze your situation and outline your springcleaning options.

So as you polish the windows, shake out the carpets and clear out the garage, don’t forget the most rewarding task of all: spring-cleaning your debt. Your financial house will enjoy the fresh beginning, too!

While the average Canadian may not be thinking about their credit score, if you’re in the market for a mortgage it’s important to not only know your credit score, but also what your credit history looks like and how it can affect your rating. A poor credit report can seriously jeopardize your ability to get the financing you need at an interest rate you can afford. And, when you consider that a black mark on your credit history can stay there for up to seven years, it becomes clear why maintaining a good credit score is imperative.

A home buyer’s credit history is an integral part of the mortgage approval process because a person’s history is a reliable indicator of how they will pay down their mortgage and manage their finances in the future. A credit profile provides a snap shot of what is happening with a person’s finances today and lets us determine if we are taking any risk if we issue the loan.

While the amount of available credit is considered in your score, a more important consideration is how responsiblyyou manage your credit. Making regular monthly payments on time and avoiding delinquencies is one piece of the credit score puzzle, but of equal importance is how you use your credit.

If you are going to carry a balance on a line of credit or credit card, it’s important to keep it well below the limit of that credit source.  Even if you make your minimum monthly payments, consistently hovering around your credit card limit can indicate a tendency to take on debt.  And, remember that department store credit card you cut up years ago?  Well if you forgot to cancel the card, that, along with other dormant accounts can also affect your rating.

You may be surprised to know that the number of inquiries made on your credit report by organizations assessing your credit profile might also have an adverse affect. Every time you apply for credit, whether it is at a car dealership, furniture store, or another financial institution, an inquiry is made on your credit report, and too many inquiries can be a sign of poor fiscal management. As a result, you may want to consider holding off on large purchases until after your mortgage financing is secured.

So, who makes a good candidate for a mortgage?

The ideal candidate generally has a credit score above 680, a consistent payment history and outstanding balances that are well below their credit limits. We’re also looking for a stable employment history, and the size and source for the down payment. All of these things help demonstrate whether a person can afford to carry the mortgage they are applying for and if they will pay it back.

While there are a wide variety of mortgage products available today, even for home buyers with bruised credit, having good credit works to your advantage because it helps to secure a lower interest rate. That translates into savings over time as more money goes toward your mortgage principal rather than interest.

It is highly recommended that in addition to making regular payments and keeping balances low, Canadians review their credit report on a regular basis to ensure that any errors on their reports are caught prior to applying for a mortgage.  Regularly monitoring your credit activity can also protect you against identity theft and fraud.

What you may not know is that you can actually use a mortgage to re-establish your credit. Canadians are carrying heavier loads of personal debt than ever before.  For some, the cost of servicing those debts is itself an obstacle to correcting the problem.  Each month can be a chase to make the interest payments to keep the debt afloat.  But if debts are rolled into a new mortgage, your credit can improve rapidly, assuming of course that you don’t rack up any new debts!

Here’s how it works:

Perhaps you have maximized your credit cards - and maybe even have a short-term loan or line of credit that you are also trying to pay down in addition to your regular mortgage payments.  You may be considered a “high risk” borrower under these circumstances, even if you are managing to squeeze out your payments each month.  Your overall payment history is satisfactory, but your debt load is heavy. If you consolidate your debts into a new mortgage, you can better manage those debts while also restoring your credit rating. 

You may not have considered using a mortgage to refinance and manage your debts, but there are a few significant advantages.  Your status as a homeowner can give you access to a lower overall borrowing rate. A house is considered very reliable security, so mortgages often offer the best rates available anywhere.  In addition, your credit history enjoys an almost immediate boost, as you begin to make your monthly payments.  There are many innovative mortgage options available today, including a mortgage product that has been designed specifically as a credit repair tool. 

This specialized mortgage is good news for clients who are trying to distance themselves from their past credit problems.  Debt is controlled quickly - since the new mortgage offers an interest rate lower than credit cards that can dramatically reduce the interest charges on your debt - and your credit typically improves in only a few months.

You probably already know that it makes sense to consolidate your debt into one payment.  You can generally enjoy substantial savings on interest charges; you have a more manageable monthly payment and better monthly cash flow.  Consider how a new mortgage can help you manage your debts - and make it a goal this year to improve your credit rating.

Lenders have access to this information. Think about it.  When you decide to apply for a mortgage for a home purchase, or a hefty loan for home renovation - don’t you want A+ right up there beside your good name? 

Your good name is really what’s it’s all about.  In the financial world, your credit profile is your reputation.  If you have a good record, it means smooth sailing ahead for you. If your record isn’t all it should be, you might be in for a bit of rough weather when it comes to acquiring the monies you need — at the interest rates you want.

Your payment history — especially of credit card debt — is one of the most important factors considered when your score is being tabulated. Any missed, late, or neglected payments are duly noted. Not only does a prompt payment history buff your credit image — it saves you money in interest, and assures a quicker retiring of that debt too.

Timeliness of payments, actual amount of payments, the state of your credit card balances versus credit available, the number of cards you own, the frequency of your requests for more credit - these are just some of the tidbits of personal financial information that make up your credit profile. This comprehensive history is compiled to show lenders how reliable a debt risk you are. To put it simply - they want to know whether or not you are credit worthy.

Your credit score is established with a mathematical formula. Various factors are weighed and balanced and given a certain percentage value towards your final score. Credit bureaus also take into consideration — in addition to factors already mentioned — your existing debt burden, your actual and potential income (remember you do give out these details when you apply for credit), your debt to income ratio, your past financial problems (any bankruptcy or foreclosure remains a long time on record), your job stability - essentially any piece of public information that helps build an accurate as possible risk assessment of you as debtor.

Your credit rating is a fluid and an ever-changing thing, dependent upon your present financial circumstances and any actions you make. The credit bureaus always follow your money trail. Because the formation of your profile is an on going thing, it’s vital for you to consistently practice reliable and responsible debt handling. The good news? The ever-changing quality of your credit rating allows you to continually aim for a higher score. Think of your rating — not as a burden — but as a challenge and an opportunity.

Infrequent requests for additional credit? That’s a really good sign to a lender. Keep in mind that mortgage and loan shopping won’t impact you negatively if it’s done in a concentrated time period. The credit bureaus interpret this flurry of activity positively — as long as it doesn’t occur too frequently. You want to look savvy, not desperate.

How much plastic is too much? Too many credit cards red flag you to potential lenders. Limit your cards to three or four, and try to maintain longtime use of at least one card. This is a key way to build up an excellent credit history. The amount of credit you use, versus credit available, is really telling too. Keep your balances low.

It’s your right to pull up your credit report profile and it’s in your interest to do so. (You can do this online at www.equifax.com). Experts advise you to check it out at least once a year. Doing so gives you the opportunity to correct any errors or misinformation that may be there. Practice reliable and responsible debt management. Then, when you do actually need money for a major undertaking (like the purchase of a home), your credit rating will be an asset, not a liability.

Real estate has been an outstanding investment in most parts of Canada in the past few years. Home valuations have broken through the peak of their 1989 “bubble” in many areas of the country. That’s good news for Canada’s 7.5 million home owners, who are enjoying an average increase of $43,000 in real estate wealth since the upward trend took hold in 1998.

The hot housing market is being fuelled by mortgage rates which remain at historically low levels. First-time home buyers are finding the rates attractive, and home buyers are lining up to purchase their first home or to upgrade to their dream homes. Housing statistics have been capturing headlines for months and the boom is noticeable on key economic indicators.

But the news isn’t just about rising valuations or Canadians moving into their new homes. Quietly in the background, there is a significant trend to refinancing. Canadians who have built up the equity in their home over the last few years are borrowing against that equity in record numbers. According to a report from a major bank, since 2001, Canadian households have taken out approximately $20 billion in cash out of their homes through mortgage refinancing and home equity loans.

We might thank the mortgage industry for the surprising resilience of the North American economy. In the past two years, the North American economy has endured numerous economic fallouts but consumer confidence remains reasonably strong - at least partly because homeowners have seen some of their losses offset by an increase in their real estate wealth. We find that we are sitting on (and sleeping in) the best-performing investment we own. And even if they have no plans to sell, homeowners have found that the return on their investment is still as good as cash in the bank.

That cash has been a key economic stimulus both here and in the U.S., where the trend is even more pronounced. As Canadians look beyond the view of a home as primarily shelter, mortgages become a valuable resource - and homeowners aren’t necessarily waiting for renewal time to cash out some of their gains.

So where is the money going? The equity being pulled out is often being used to pay down other more expensive debt. Credit card interest rates are shockingly high and - as a nation - our credit card and other consumer debt is continuing to grow. And much of the money is being used for increased spending. There has never been a better time to borrow against home equity to build the kitchen of your dreams, add a new wing, embark on the landscaping project you’ve wanted for years, enjoy the vacation you’ve always dreamed of, or help with the high cost of post secondary education. However, as always, never let your enthusiasm for the opportunity to spend get in the way of good common sense about debt management.

If you’re looking for the holes in your wallet, start by making a list of your debts.  Are your credit cards teetering at the top of their limits?  Do you make regular use of your overdraft protection at the bank?  Do you have escalating tax liabilities?  What about any department store cards?  And - quick - what was the interest rate on those balances last month?  Have you added it up?   Many Canadians are startled to see how much they are actually paying to service their debt.

Industry Canada, which monitors consumer data, reports interest rates for department store credit cards as high as 28%.  Even competitive-rate credit cards will often run at 18% or more. And this is at a time when some mortgage rates are still tipping below 5%.

Why do the banks and department stores charge such high rates?  These are unsecured debts, meaning that - if you default on the debt - the lender has no easy recourse to recover the money.  Not surprisingly, they charge a higher rate - sometimes a MUCH higher rate - to compensate for the higher risk that an unsecured debt represents.  A house is considered a reliable security, so mortgages often offer the best rates available anywhere.

Consider this, then.  If you have equity in your home, you can take advantage of attractive mortgage rates to save a bundle on interest charges.  Compare current mortgage rates with the rates charged on your other debts.  Get some professional advice on whether it might pay to do some refinancing and roll your other debt, such as credit card debt and tax liabilities, into your mortgage.  You can consolidate your debt into fewer payments, save some money on interest, and improve your cash flow.

You have a few options: A secured line of credit could provide you with funds up to 75% of the value of your home, minus any mortgage debt on the home.  You can look forward to a substantial reduction in the interest rate, and all you need to pay each month is the interest.  You can do the math on this comparison yourself, or talk to a mortgage professional.  If you are carrying credit card debt, you’ll be shocked at what you can save with a secured line of credit.

You could also consider increasing your existing mortgage.  If your mortgage is coming up for renewal, this is the perfect time to reorganize and consolidate your debts at today’s excellent rates.  Even if you are in the last year or two of your mortgage, it may make sense to renegotiate your mortgage now and roll in your other debt at a low rate.  Or, you may be able to benefit from this kind of debt consolidation through a second mortgage.

Your best option - have a professional outline your options for using a mortgage to consolidate your debt and increase your cash flow.

Traditionally, homebuyers needed to provide a minimum 5% downpayment from their own financial resources in order to purchase a home.  The policy was an informal test of the savings discipline of the prospective homeowner and his or her ability to manage the financial responsibility of a mortgage.  In the past few years, it has also been a test of nerves - as would-be homeowners watched mortgage rates fall and house prices climb while they scrambled to meet the CMHC downpayment requirement.

That 5% minimum downpayment can now come from any source: credit cards, personal loans, lines of credit, or even cash-back incentives offered by mortgage lenders.  This helps would-be homebuyers with the cashflow to take on a mortgage - but who are still struggling to come up with a downpayment.  Many young people, for example, have begun to enjoy good income - but their student loans have left them with non-existent savings.

If this flexible downpayment policy seems surprising, it’s because our ideas about mortgages have been ingrained by many years of experience with traditional mortgage products in traditional institutions.  But while banks still offer a wide-range of mortgage options to Canadians, they have been joined by other types of lending institutions, who have been developing innovative new mortgage choices for Canadian homebuyers - and responding to changing customer preferences and a shifting rate environment. 

The objective of CMHC’s policy and the innovative new mortgages is the same: to help qualified Canadians step quickly into home ownership.

Every prospective homebuyer, of course, should discuss their situation with a mortgage professional - and make a realistic assessment of the risks and financial responsibilities of a mortgage.  But we’re experiencing strong housing prices and mortgage rates at historically low levels.  And for Canadians with financial discipline and good income prospects, these new “no money down” options mean they won’t have to stand on the sidelines of this historic opportunity!

Reimbursements.  You’ll need to refund the money that the seller has already paid out on your behalf: expenses that are now fairly and rightfully owed by you, the new homeowner. In your lawyer’s office, on closing day, you’ll definitely run into those famous last words: “subject to the usual adjustments”.  Typically these adjustments include portions of municipal property and school taxes for the months you’ll be resident, utility bills paid in advance, fuel oil that you will be using - that kind of thing.  These expenses would have to be paid by you anyway, so they are fair.

Land transfer or similar tax. Your province levies this tax whenever real estate changes hands. It’s sometimes also called (ironically) a “welcome tax”.  They do literally get you coming and going! The amount of this tax is a percentage of the purchase price of your property, so the more expensive the property, the bigger the tax.  Ask about Transfer Taxes in your province or the province you are moving to for full details.

Home insurance. This insurance, especially fire, must take effect from the moment you are the owner of the home. It’s all about protecting the investment for the lender — and in this case it works for you too.

Mortgage Life and Disability insurance. This is an especially good idea for young parents or anyone else with dependents. If anything should happen to either one of you, your home ownership won’t be in jeopardy.  The mortgage would be paid in full - immediately - on your behalf.  You’ll appreciate and need this peace of mind in a time of crisis, and you’ll save your family the extra burden of wondering if they would need to sell their home (even while they’re coping with a loss).  Your broker can often help you find a policy that works for your situation.

Home inspection fee. This is the fee you owe the inspector you hired to check out the physical structure and mechanicals of your home before you decided to buy it.

Home appraisal fee. Your lender requires this appraisal before they hand over any mortgage money. Naturally, they want to be assured that the property is worth an investment of their monies, and naturally, the cost of this appraisal is passed on to you, the customer. This fee normally ranges between one and two hundred dollars - dependent upon location and complexity of the property.

Survey. A legal survey of your land - its borders, perimeters, house placement, etc. — is sometimes required by the lender, and will be performed by a professional surveyor. If you’re lucky, a recent survey is already available; if not, a typical survey can cost you up to one thousand dollars. In the last few years, lenders have accepted title insurance (highly recommended anyway) in lieu of a survey document. Which brings us to…

Title insurance. This covers a myriad number of oddball situations that could threaten your title to the property. Title insurance is much less costly than a new survey, for example, and would cover most survey concerns anyway. Most homebuyers now look at title insurance as a great way to protect their biggest investment!

Don’t forget GST. This tax is charged on all professional fees. There is no GST on the purchase price of a resale home.

Legal Fees and Disbursements. Speak to your lawyer about their fee schedule. Typically between $1,000 & $1500.

Closing Day! Today is the day legal title to the property changes hands. You’ve been busy packing, cleaning, and organizing the moving procedure at either end. The last thing you need to do is traipse down to the lawyer’s office… but that’s exactly what you’ll have to do. Your lawyer will sit down with you, carefully go through a pile of papers for signing, point out closing costs. But a good broker can help you be well-prepared for all the things that happen before the new house keys are finally in your hand.