November 25, 2017

Understanding Your Financial Tolerance

A good way to avoid financial pitfalls is to plan ahead and be realistic.  
Understanding your financial picture will help you reconcile what you want with what you can actually afford.  Here are 5 suggestions to assist you in making that decision

1-  Calculate Your Net Worth – determine your total assets and then subtract your outstanding debts.  This will give you a clear picture of your financial health.  
2-  Verify The Mortgage That You Can Afford – once you know your down payment, calculate what you can afford as a mortgage payment and this will help you determine how large a mortgage you can carry.  Your mortgage payment will depend upon your amortization period, term, type of mortgage ie fixed or variable rate, weekly/monthly, etc. and your down payment.
3-  Save For Your Down Payment – the higher your down payment, the lower your monthly mortgage costs will be.  In Canada, the minimum down payment is 5% and if you put less than 20% of the total purchase price, you will require mortgage default insurance.  This insurance premium ranges from 1% – 2.75% based on the amount your are borrowing in relation to the purchase price.  
4- Contemplate Other Costs – keep in mind other costs over and above the purchase price.  There are home inspection fees (approx. $500), appraisal fees (if required approx. $300), legal fees (approx. $1,500), land transfer tax (approx. 1.5% of the purchase price), house insurance and hook up fees of utilities, etc.  Research these costs to avoid any surprises and build them into your budget.
5 – Learn To Budget – getting into the budgeting habit is a great way to prepare for purchasing your new home.  It will help you understand where your money is being spent and how much you can afford for your mortgage payment.

If you know anyone that could benefit from my vast knowledge of working out a budget and qualifying them for their home purchase, please call me anytime.

This week is Homeownership Education Week provided by Genworth Financial which is the largest private mortgage insurer in Canada.

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



Credit Repair

It happens to everyone, you max out your cards, missed or been late on your monthly payments and you have to borrow off your credit card to make your payments and you have just found out that you have a poor credit score.  You now need a plan!You must be serious and committed to making changes in your lifestyle.


  1. Make a budget and stick to it. Do not cut up your cards but occasionally use them to rebuild your credit
  2. Ensure you pay your bills earlier than the due date to ensure your payments are made promptly
  3. Always try to pay more than the minimum balance due starting with the highest interest rate
  4. Always keep your balance well below the authorized limit
  5. Avoid numerous enquires applying for credit
  6. Keep 2 – 4 cards as the more cards with a zero balance, the higher your score will be
  7. Try to use the card that you have had the longest period of time as it has a big impact on your rating
  8. Always be in touch with your creditors, explain the situation and your planned course of action.  This could avoid the dreaded collection agencies
  9. Be patient.  You will be rewarded in time with an improved rating and on your way to a financially stable life.
Please call me if I can help “Point You In The Right Direction.”

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

Tips On Maintaining Your Credit Score

Your credit score uses your past credit history to help predict how you might manage your credit in the future.  It translates your available personal information into a score of between 300 and 900.  This number represents your overall credit-worthiness.  The higher the score, the more likely you will be approved for your credit application and the more likely you will receive better interest rates because you are considered a better credit risk.


In order to keep you credit score as healthy as possible, follow these suggestions:


1- Pay your debts on time and always meet the due dates
2- Don’t take your credit cards to their limits, only use a maximum of 50% of your credit limit
3- Borrow only the amount that you can afford to pay
4- Do not apply to numerous companies for your credit, as these inquiries will definitely lower your credit score


You can obtain a copy of your credit file from either Equifax or Trans Union.  It would actually be a good idea to obtain your credit report from both reporting agencies:  

equifax.ca or 1-800-465-7166 or transunion.ca or 1-800-663-9980

 

If I can help you with understanding your report or any of the information your receive, call me anytime as I would be very pleased to assist you.

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

Will The New Mortgage Rules Effect House Prices?

In my previous blog I discussed the changes made by CMHC that were coming into effect on March 18th, 2011 which are aimed at toughening up mortgage lending in an effort to curb further growth in record household debt levels.


According to The National Post, as a ratio of money owed to disposable income we are nearing a startling 150% as of the third quarter of last year.  That surpasses the level of debt held by American households, whose appetite for borrowing helped stoke the financial crisis of a few years ago.  The Bank of Canada recently warned debt levels are growing faster than income and the risk posed by consumer indebtedness to the domestic economy would continue to escalate without a “significant change” in how consumers borrow and banks lend.


This has fueled numerous conversations about how the tougher lending rules will affect house prices.  Will people rush in before the March 18th deadline to lock into the 35 year amortization?  Chances are this is exactly what will happen and will elevate prices again.  After March 18th, that demand may go way down and with the elevated supply of new homes likely coming on the market, this will set us up for what could be a very troubling spring and summer market.  The reduced amortization is in effect the same as qualifying for about 4% less on the purchase price.


As the next six months unfold, it will be very interesting to see what impact the new mortgage rules will have on home sales, interest rates and household debt ratios.

How Do The New Rules Governing Selling Or Buying A House Affect You

Simply put, a seller can now pick and choose the level of service they want from a Realtor. You can just pay a flat fee to list or post your property on the ‘Multiple Listing Service’ (MLS) under mls.ca. You can negotiate directly with the seller and Realtors are no longer required to present offers or negotiate terms.


The Competition Bureau and the Canadian Real Estate Association (CREA) have been battling for 3 years on ‘Flat Fee MLS.’ For years it has been common for home sellers to pay both the buyer’s and listing agent’s commission (5-6%). Now people can list their property on MLS for under $100.00!! Under the agreement the public will not get direct access to the MLS website. Only members of CREA will have access to www.mlslink.mixchange.com to see current listings and commission being offered. Therefore, your listing will not be exposed to Realtors hence no Realtor will bring in an offer because they will not be able to see it.


Exciting times are ahead of us!  There are so many opportunities available and you can weigh the pros and cons of either utilizing the expertise of a Realtor or purchasing/selling a property through a Flat Fee Realtor on www.realtor.ca.  Good Luck