June 21, 2018

Before Your Big Day, Discuss Your Finances

Couples spend months, even years, planning every detail of the wedding day, but few talk realistically and openly about their financial future together.  Not being “on the same financial page,” puts couples at risk of big problems down the road.

Why do so many people find it so hard to talk about money?  Talking about our personal finances, especially with that special person we hope to make our life partner, seems to be downright frightening. It’s as if we may be leaving ourselves open to an unfavourable comparison or judgement by the other.  Financial success we can talk about all day long, but financial failure, or even just doing okay, is kind of embarrassing.

A recent poll revealed while (99 per cent) say it’s important to talk about planning and managing finances with the future partner, only 35 per cent actually have that talk.  By a large majority, those who admitted to not having the talk said in effect that they didn’t know how or when to bring it up, they were afraid to.

Two-thirds of those planning to marry or live with a partner admit that they will be entering the relationship in debt, typically from credit cards, student loans or mortgages.   It’s not hard to imagine the tension that could arise here if the couple haven’t discussed their finances and prioritized their goals.

Which money personality are you?

The “springboard” to a couple’s big money talk could be identifying their philosophies regarding handling finances. Here are four money personality types:

  • The Super-Saver: takes pleasure in saving every penny earned, avoids any spending unless absolutely necessary.
  • The Cautious Spender: careful with money, spending it prudently, putting needs over wants, and trying to save as much as possible.
  • The Carefree Spender: believes that money is meant for spending and enjoying; has a hard time saving money and meeting long-term financial goals.
  • The Avoider: doesn’t pay attention to how much money he/she has, owes, or spends; has a laissez- faire attitude towards finances, preferring to let someone else take care of them.

Start your new relationship off on a positive note, have the conversation and you could save yourself years of financial stress!

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Mississauga, Burlington, Oakville and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on our site or call 416-459-2406

Tools On How To Read Your Credit Report

When applying for a mortgage, there are many aspects in order for you to qualify and your credit rating is one of the most important.  You can make a substantial income but if your credit rating is poor, you won’t qualify.  

Credit scores range between 300-900 and the higher, the better.  The minimum score in order to qualify for prime interest rates is 650.  

When you receive a copy of your Credit Report, there will be many categories you will have to interpret. What do they represent? How do they impact you and your score? What do they mean?

PUBLIC RECORDS OR OTHER INFORMATION:

Reports outstanding and paid: Collections, Judgements, Bankruptcy
Reports the lending institution that holds collateral on i.e. a car (mortgages are not reported)

ACCOUNT RATINGS:

RPTD – the last time the account was updated/rated
OPND – date the account was originally opened
H/C – High Credit – the highest balance that was ever recorded
TRMS – terms, monthly payment
BAL – current outstanding balance
P/D – amount past due
RT – R1 reflects the account is current, R2 is 1 month arrears, R3 is 2 months arrears, R5 is more that 120 days past due, R7 means Credit Counselling, R8 means repossession, R9 the account has been written off or in collection
30/60/90 – the number of times this account has been late 30/60/90 days
MR – months reviewed
DLA – date the account was last active

If you are maxed out on your credit cards, do not make the minimum payment or carry balances on all your credit cards, your score will be very low.  In order to improve your score, pay off at least 25% of the credit card balances, do not close your credit cards when they are paid off, do not apply for any additional credit.  Your credit needs to be established for 2 years, so start early.

If you need any help understanding your Credit Report, please call me anytime.

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Mississauga, Burlington, Oakville and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on our site or call 416-459-2406

Suggestions To Improve Your Credit Score

Clients are always asking ‘how is my credit score calculated or how can I improve my credit score.’  With all the uncertainty in the housing market, your credit score has never been more important.  More than ever, your credit score determines the interest rate on your mortgage.

The main factors in determining your score are as follows:

  • Payment history:  35%, how have your repaid the credit you have already been extended, details on late or missed payments, how much you owe.  Records of collection items, bankruptcies, judgements
  • Used credit vs. available credit:  30%, how much of your authorized credit is being used, how much you currently owe compared to the original amount.  If your credit does not fluctuate or you are over your credit limit, this has a very negative impact on your score
  • New credit:  10-12%, how many new credit accounts you have opened and how many requests for credit have recently been initiated
  • Length of credit history:  5-7%, how long your credit accounts have been established.  Creditors like to see that you’ve been able to properly handle credit over a period of time

Suggestions:

  • ensure your payments are made to the credit card company at least 5 days prior to the due date because if your payment is even 1 day late, you will show as a late payment
  • ensure you never go over your approved limit on your credit card or loan
  • make sure you fluctuate your credit card balances, try not to pay just the minimum payment
  • do not apply for numerous credit cards.  If you are trying to establish a credit history, don’t start by applying for a Visa card where you will be probably turned down.  Start with a Home Depot, Canadian Tire or other retail card
  • don’t let your ego get the better of you!  You know when you get ticked off at Bell or Rogers and say, the heck with them, I don’t owe them $200, it was their mistake.  If there is a chance it will go for collections, pay it and then fight with them because unfortunately you are the one that is going to get the bad rating on your file
  • don’t close cards that you aren’t using because they look at how many accounts are delinquent in relation to all of your accounts.  If you have 10 accounts and 5 are delinquent, you will be rated differently than if 5 are delinquent and you only have 5 accounts.  It is a numbers game!

Call me if I can help you understand how to read or how to improve your credit rating!

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Mississauga, Burlington, Oakville and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on our site or call 416-459-2406

https://www.equifax.com/personal/education/credit/score/how-is-credit-score-calculated

Now May Be The Perfect Time

refinancing House values are at the highest level they have ever been and rates are still incredibly low.   Now may be the perfect time to refinance your mortgage.  There are many reasons that you may want to refinance your home to enable you to take advantage of the equity that you have built up.  Here are some reasons for your consideration:

  • Debt consolidation
  • Reduce your monthly expenditures
  • Divorce/separation
  • New business start up
  • Investment into your business
  • Investments into other vehicles or retirement planning
  • Home renovations
  • Second properties
  • Unexpected expenses

FEATURES:

  • Refinance to a maximum of 80% loan to value (LTV)
  • Terms 1-5 years and amortization up to 30 years
  • HELOC available
  • Maximum 3 units and 1 unit must be owner occupied
  • Secondary Homes up to a maximum of 2 units

I recently refinanced a client that owed $370,000 on their 1st mortgage and wanted to consolidate $71,000 of outside debts.  They were paying a total of $2,974 per month on their mortgage and other debts.  The new mortgage of $443,000 cost them $2,071 per month, which saved them $902 each month!  Not only does this greatly improve their monthly cashflow but the credit cards were never going to get paid in full by only making interest payments.

I can work out all the calculations and let you know what interest rate you can expect to receive, the monthly payment and how much money you should save on a monthly basis.

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Mississauga, Burlington, Oakville and Toronto and offering all mortgage related services such as 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on our site or call 416-459-2406

Some Ways The Budget Could Cool This Market

In the current housing market, we are all appalled at the crazy increases, how can anyone afford to purchase a home!!  Something has to be done and hopefully in the budget next week we will see some changes to cool the market.

I was elated to hear that Ontario Finance Minister Charles Sousa will be targeting real estate speculators and investors, or as he calls them “property scalpers”, which are speculators that resell contracts for pre-construction homes multiple times before closing.  They go into new developments, buy up a slew of properties, and then flip them, while avoiding paying their fair share of taxes.

A similar practice called  “shadow flipping” became very common in Vancouver.  Typically a real estate agent would resell the same home multiple times before the closing date, driving up the price of the house, sometimes by hundreds of thousands of dollars.  In May 2016, the B.C. government put in place new rules that require real estate agents to draft offers that require the seller’s consent to a contract transfer, and any resulting profit to be returned to the seller.  That I would like to see in our budget.

Sousa’s office is considering a number of possible measures, including implementing a tax on foreign buyers, vacant homes and speculators and to close a loophole on profits and capital gains.

Speaking of vacant properties, just in the GTA, it is estimated there are as many as 65,000 vacant dwellings.  Typically it is almost impossible to get home insurance on a vacant property.  An empty homes tax introduced in Vancouver this year charges 1 per cent or $10,000 on a $1 million property that isn’t occupied by the owner or family or, rented to a tenant, at least six months of the year, another fabulous idea!

Colleen Saunders is a 20 year veteran in the mortgage industry, serving Oakville, Mississauga, Burlington and Toronto and offers all mortgage related services such as 1st and 2nd mortgages, private mortgages and more.

To contact Colleen, please fill out the form on  www.mortgagesbycolleen.ca  or call 416-459-2406

http://www.mortgagebrokernews.ca/business-news/sousa-hints-upcoming-housing-measures-will-target-property-scalpers-224231.aspx