Mortgage lenders will use your credit score to help them decide whether to approve you for the home you want. The better the score, the greater the chance you’ll get the mortgage you’re looking for, and potentially at a lower interest rate. Your credit score is not the entire story. Mortgage lenders will consider more than just your score when underwriting your file. Some additional factors include your employment status/length, income, and savings/assets. So, how can you improve your credit score?

There are many different credit scores a lender can consider. The most common in Canada are provided by the two major credit reporting agencies — Equifax and TransUnion. In addition to that, some lenders have unique custom scores that only exist on their internal systems.

If your score isn’t where you’d like it to be, there are some things you can do to help bring it up.

1. Check your credit report!

When looking to improve your credit scores, a good first step is to review your credit reports from both nationwide credit reporting agencies — Equifax and TransUnion. After making sure there are no accounts you don’t recognize, or signs of identity theft or fraud, check to see if you have any unpaid balances or past-due accounts that have gone to collections. It’s a good idea to tackle this negative information first by paying off as many outstanding debts as you can. Remember that although it’s important to pay any accounts in collections, they will remain on your credit bureau for a period of six years from the time they went into collections.

2. Always pay your bills on time

One of the top things you can do to lift your credit score is to pay your bills on time. Payment history is a significant piece of what makes up the entire score, so it’s critical to avoid late payments. If you struggle with this, talk to your bank about setting up automatic payments or set calendar reminders to help you pay on time.

3. Don’t max-out your balances

Your credit utilization ratio is the amount of overall credit (limit) you have compared to the balance that is reported to the credit bureau. For example, if your credit limit is $10,000 and your reported monthly balance is usually about $3,000, then your credit utilization rate is 30 per cent. It’s best to keep your credit utilization rate at or below 30% when possible. If that’s not an option, then try to keep it under 75% if you can. You can do this by spending less on credit, making more frequent (more than once-a-month) payments, or asking your credit card company for a credit limit increase.

4. Limit new accounts

Applying for new credit accounts (especially non-mortgage accounts) will usually lead to a hard inquiry on your credit report. This can negatively affect credit scores for a short period of time, particularly if you’re at the lower end of the credit score spectrum. If increasing your score is your goal, try to limit how often you apply for new accounts. Opening a new credit card or loan account will also decrease the average age of accounts on your report, which is another factor used in calculating your credit scores.

5. Keep your accounts open

When trying to increase your score, avoid closing old accounts that have been paid off, even if you no longer use them. One of the factors in credit scores is “average age of accounts,” so keeping the accounts open can help maintain the length of your credit history.

When will my score increase?

The amount of time it takes to improve a credit score varies depending on your circumstances, but it will require a bit of patience and won’t happen right away. Some negative factors are easier to overcome than others.

It may take you less time to recover from one late payment or a few hard inquiries than from having an account go into collections. A consumer proposal or bankruptcy will take even longer to recover from. Just remember to keep at it! Improving your credit takes effort and time. There’s no one-size-fits-all solution that will change your credit score overnight. Every little bit counts!

Reach out to us today for a free assessment of your credit and personal financial situation. We can Guide you through the steps needed to get you approved for a mortgage!

Your Dream Home Awaits: A REALTOR®’s Guide to Credit Mastery!

Hello future homeowners!  As your dedicated REALTOR®, I’m thrilled to share some insider tips on navigating credit for that perfect home purchase, brought to you by @AdvancedMortgage.

1. Credit Health Check: Let’s kick off your journey with a comprehensive credit report check from Equifax and TransUnion. Together, we’ll ensure your credit is in top-notch shape—no surprises, no red flags. Your dream home deserves a clean slate! 

2. Timely Payments Matter: Paying your bills on time is crucial. We can explore options like automatic payments or set up handy calendar reminders to keep you on track and avoid those pesky late fees.

3. Smart Balancing Act: We’ll strategically manage your credit utilization – aiming for that sweet spot below 30%. Need some pro tips? Count on us for savvy solutions.

4. New Isn’t Always Better: Together, let’s navigate the impact of new credit accounts on your report. Too many inquiries can raise eyebrows. We’ll create a plan to maintain a smooth and steady course.

5. Age Before Beauty: Old accounts hold significant weight. Even if they’re paid off and quietly resting, we’ll keep them open to preserve that valuable “average age of accounts.”

Your Journey to Improvement: Patience is our ally. While improvement timelines may vary, every step counts. Let’s work hand in hand, shaping the path to your dream home!

Ready for a tailored credit assessment and seamless mortgage guidance? Reach out for a complimentary consultation today! Together, we’ll turn your homeownership dreams into reality.

Contact me for more information about why now is a great time to buy!https://robynmoser.com/

As was widely expected, the Bank of Canada has left its key lending rate unchanged at 5.00%.

This marks the Bank’s fifth straight rate hold since it last raised rates back in July.

In its statement, the Bank said it is “still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation.”

“Governing Council wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour,” it added. 

Read More: For a detailed view, access the Bank of Canada’s full statement.

What this means for your mortgage

• Variable-rate mortgages: No change in your rates, with the prime rate holding at 7.20% at most major lenders (excluding TD, which has a mortgage prime rate of 7.35%).
• Fixed-rate mortgages: Your mortgage term remains unaffected by this announcement.

Looking forward

We’re closely monitoring the landscape as we approach anticipated rate cuts by the Bank in the second half of the year. Meanwhile, the Bank’s next rate decision is scheduled for April 10. Should you have questions or wish to discuss adjustments to your mortgage strategy in light of these developments, please don’t hesitate to reach out.

Together, we can navigate these changes to ensure your mortgage strategy remains well-aligned with your financial goals.

Best regards!

Given today’s affordability challenges, finding your perfect dream home right off the bat isn’t always feasible. 

But did you know there are financing options that allow you to incorporate renovation costs directly into your mortgage? This means as long as you find a home in your desired location, you can then customize or update it to meet your specific needs and tastes.

Home renovations not only help make your new home truly yours, but they can also increase its value. 

Kitchen remodels, bathroom additions and energy-efficient upgrades are among the top renovations that can yield the highest returns on investment. Secondary suites have also emerged as popular reno projects as a way for homeowners to create an additional revenue steam by renting out a portion of their home. 

However, the question of funding these projects often presents a challenge. That’s where your mortgage steps in, not just as a means to own your home, but as a resource to improve it.

How to access your home equity

Let’s take a look at some of the key financing options available for renovation projects.

1. Purchase plus improvements
This financing solution is a valuable tool for homeowners who want to renovate a newly purchased property, allowing you to add the cost of your renovations to your mortgage for as little as 5% down. By incorporating renovation expenses into your mortgage, you can make improvements right from the start, turning a nearly-right house into your perfect home.

2. Home equity loans and lines of credit
For existing homeowners, one way to access the equity they’ve built up is through a home equity loan or a home equity line of credit (HELOC). A home equity loan provides you with a lump sum, ideal for funding a significant renovation project with a defined budget. A HELOC, meanwhile, works more like a credit card, giving you access to a line of credit based on your home’s equity, which you can draw from as needed. This option is particularly useful for ongoing or phased renovation projects.

3. Mortgage refinancing
Another avenue is refinancing your mortgage. This involves taking out a new mortgage that replaces your existing one. If your home’s value has increased since you first purchased it, you may be able to borrow more than what you currently owe, providing extra funds that can be used for renovations. 

However, the current interest rate climate may mean refinancing at a higher rate. But with rates expected to fall over the next year and beyond, refinancing could soon become a more appealing option.

4. Government assistance programs
A fourth option is to take advantage of the multitude of government programs available to help homeowners finance their home improvement projects. These programs often include grants, loans, and tax credits aimed at encouraging energy-efficient upgrades, improving accessibility for seniors or individuals with disabilities, and supporting low-income homeowners. Each program has specific eligibility criteria and application processes, and generally vary by region and the scope of the renovation project.

Expert advice is key
Before proceeding with any financial decision, give me a call so I can help you understand the options available, the total funds you may be able to access, and how to align your renovation goals with your financial situation. A well-informed decision can lead to a more beneficial and stress-free renovation experience.

Let’s unlock the potential of your home’s value together!!  

The Bank of Canada leaves benchmark rate at 5.00%

As expected, the Bank of Canada has left its key lending rate unchanged at 5.00%.

This follows 10 previous rate increases over 12 rate announcements, which raised the overnight target rate by 475 bps since March 2022. 

In its statement, the Bank said it is “still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation.”

However, the Bank added that with expected GDP growth of just 0.8% in 2024, it expects inflation to continue to ease from around 3% in the first half of 2024 to its 2% target in 2025. 

What happens now?

As a result of today’s decision, prime rate will remain unchanged at 7.20% and there will be no changes to existing variable-rate mortgages. This announcement also has no impact on fixed-rate mortgage holders.

The Bank’s next announcement will take place March 6. 

If you have any questions or concerns about the rise in borrowing costs over the past year, I encourage you to reach out so we can discuss your personal situation and options. 

• Read the Bank of Canada’s full statement here.
• Read the bank’s latest Monetary Policy report here.