We recently had a couple come into our office who we had worked with in 2011. They had some life changes that had occurred in the past 7 years and were unsure if they could make things work. They came back to speak with us and shared a little bit of their story and thoughts on working with a broker. Check out their story below! **Names Changed for privacy purposes**

Jane and her husband Kevin never in a million years would have thought that they could own a detached home in the Fraser Valley. One look at the market and they felt “stuck” where they were in their two-bedroom townhome in Kamloops, British Columbia. They had purchased their townhome in 2011 by working with us at Dominion Lending Centres.

They loved their little home but a job opportunity for Kevin opened up and the need for more space (with baby #2 on the way) was pulling them towards the Fraser Valley. Now they had their doubts about being able to afford a house in the Lower Mainland. They had strong credit and very little debt, but there is always the “unknown” when you are looking at buying a home. They decided to reach out to their us again—and we were all in to make their dream become a reality!

After a few weeks of shopping around they found a picture-perfect home in the Valley for $675,000—and were able to move in just last month (just in time for the holidays!)

When asked why they opted to work with a broker, they said it was due to the ability of Mortgage Brokers being a “One stop shop”—no shopping around from bank to bank or having to have your information pulled and sent off to several different lenders. It was all done for them. They were able to send all of their information and let us do the rest. And the best part for Jane and Kevin? We got them a great rate back in 2011 and were able to do the same in 2018!

Why else should you choose to work with a broker instead of the bank? Just a few reasons for you…
1. A broker can access rates that your bank can’t. They can access:
i. Tier 1 banks in Canada
ii. Credit Unions
iii. Monoline Lenders
iv. Alternative Lenders
v. Private Lenders

This extensive network allows brokers to ensure that you are not only getting the sharpest rate, but the mortgage product is also aligned with the client’s needs.

2. A broker will negotiate on your behalf, directly with a lender. There is no “grunt work” needed on your part—your mortgage broker does it all for you.
3. A Mortgage Broker can produce and show you several different options so that you can select the optimal product for your specific needs. A broker won’t just look at the rate, they will also look at:
i. Prepayment options
ii. Costs of Borrowing
iii. Portability
iv. Blending and Extending
v. Penalty to break
4. A broker can save you some serious cash! Because they have access to a multitude of different lenders and can offer discounts the bank can’t people end up saving money when they work with a mortgage broker.
5. Working with a broker means you have someone on your side—always. Mortgage Brokers will work to provide you with industry information and updates long after your mortgage is completed. They want to make sure that the product that was right for you when you signed is still the right one for you today and in the future.

Mortgage Brokers are a dedicated group of individuals who work directly for the client, not the lenders or the bank. Brokers are problem-solvers, advisors and honourable individuals. We work hard to give our clients the best that we can in an industry that constantly is evolving and changing.

Kevin and Jane made the right choice working with us here at DLC.

What is Title Insurance? Good question!

Title Insurance protects you, the homeowner. It’s not like traditional insurance in that it does not ONLY cover things that might happen, but it also covers things such as property defects that have already occurred in the past.

A title insurance homeowner policy will cover:

• Forgery – If someone forges your signature on a registered document that entitles them to sell or mortgage your home.
• Duty To Defend – If you experience title risk, the policy will cover the legal fees and costs associated with restoring and protecting your title.
• Lack of Building Permits – Prior to purchasing the home, if there were renovations performed without the proper building permits you may be required to remove or fix the structure.
• Fraud – If someone fraudulently transfers your property without your consent.
• Encroachments – If a structure built by a previous owner is outside the property boundaries, or if a neighbour builds a structure that is on your property.

Title Insurance offers you peace of mind if anything should happen to your property once you are the owner. It is relatively low cost, on average coming in at $200-$400. It is a one-time purchase and does not need to be purchased each year. More than reasonable right?

If you are still on the fence about obtaining title insurance, we’ve recently had a client who experienced title fraud:

A woman went to her bank to make a payment on a line of credit that was secured by a mortgage on her property. When she arrived, she was told that her $30,000 line of credit had been paid in full and that according to the lawyer who sent the funds, her house had been sold.

This left her quite perplexed, so she followed up with the land registry office. They confirmed the sale of the property for $350,000 and that a new mortgage was registered on the property for $325,000. The woman was stunned to find out that she had been the victim of a title fraud scheme—and that the fraudsters had collected $350,000 on the deal.

Thankfully, in the above case the woman was covered by a Title Insurance Policy which fully covered all her legal fees to remove the mortgage from title and rightfully transfer it back to her. Having the coverage saved her approximately $12,000 in legal fees, time, and stress.

Your home is a sizable investment and one you worked hard to purchase! Title Insurance can protect you and your property should there be anything that comes up. For the $200-$400 it costs, we feel that’s a low-price tag for peace of mind. Ready to get a quote? Let us help you by contacting Dominion Lending Centres mortgage professional to set up your Title Insurance Policy!

Though credit scores aren’t always an indicator of financial health, they are used in a variety of ways that could have a major impact on your life. Interest rates (including mortgage rates) are almost always determined by your credit score. Some employers & landlords may require a credit check to see if you have past credit issues.
Remember this is your credit report, not your “I’m Fiscally Responsible” report. Lenders want to know how you have historically handled credit in order to determine if you are a good credit risk. Higher risk = higher rates!

The Rule of Two:
• You should always have 2 “tradelines” going. This can be a combination of 2 credit cards OR a credit card and a line of credit/ loan etc.
• Credit lines should have a minimum $2,000 limit
• Minimum of 2 years old

So, if your credit score sucks, it could be costing you.
The good news is, you don’t have to live with bad credit forever. There are plenty of things you can do to improve your credit score. Use the 9½ tips below, to improve your credit score

#1) Know Your Credit Score and Credit History
Request a free copy of your credit report from both of Canada’s credit agencies (TransUnion and Equifax). You are legally entitled to one free credit report yearly from each credit agency. Check out my BLOG How to Get a FREE Copy of Your Credit Bureau

#2) Review both TransUnion & Equifax Reports for Any Errors or Discrepancies.
If you find any errors in your credit report, you should dispute them with Equifax or TransUnion and request to have them correct any errors.

#3) Pay On Time, EVERY time!
This might seem obvious, but you need to make your payments on time, every time! This is crucial to repairing and maintaining your credit rating. The largest percentage of your credit score is based on your payment history!! Even being a couple of days late will have a negative impact on your score. Staying current with your payments has a huge positive impact. If you can’t pay the balance off in full, pay the minimum amount on time!

#4) Don’t Go Over Your Card’s Credit Limit
Going over your credit limit, even once will have a huge negative impact on your credit score. You need to be aware of your credit limit and your current debt levels to avoid this.

#5) Pay Off Any Overdue Accounts ASAP
Paying off a collection account will not remove it from your credit report, so do your best to avoid going to collections. If you have any overdue accounts that have gone to collections, negotiate to pay them off ASAP.

#6) Reduce Your Debt
Easier said than done, but if you want to increase your credit rating, you need to reduce your debt. The closer you are to your credit limit, the lower your score. In a perfect world you only want to use about 30% of your available credit. If you have a lot of credit card debt you might consider a loan (with lower interest rates than the credit cards) to consolidate your debts.

#7) Limit Your Inquiries for New Credit
You lose points from excessive hard inquiries on your credit bureau. Any attempts to take on multiple loans/credit cards will look bad in your report.

#8) Avoid Closing Credit Cards
Account age is a factor that reflects positively on your credit score. Too many new accounts lowers your average account age and negatively impacts your credit score. For the same reason, you may want to keep an old account open, even if you are not actively using it.

#9) Time is your Friend
When rebuilding your credit, time will be your best friend. The impact of past credit problems lessens with time, so that a late payment from a year ago will have much less weight than a late payment today. Get current and stay current.

#9.5) Protect Your Credit from Identity Theft
As more of our personal information gets circulated via the internet, there’s more room for “bad people” to steal your personal details so that they can make fraudulent purchases in your name. This can be extremely damaging to your credit history. You can protect your credit history from this by paying for a service that can alert you to fraud.

If you have any questions, contact me at 705-691-7646 or email rodney@ndlc.ca

So you’re wanting to buy a new home? That is some very exciting news. First question, are you prepared?!
We all know big-item purchases are scary. It’s expensive, you are fully committing to this household – there is no turn backing without that pricey consequence. We totally get it.
The ultimate first-step is to do your research. You are going to want to find out the essentials before you start hunting for those pretty houses listed on Pinterest!
Let’s start here.

Credit History
• How many credit cards do you currently have under your name?
• Do you pay your bills on time?
• How many loans do you currently have?
If you own a credit card or have a loan with an established bank, you have credit history. This information is then transferred into a financial summary known as a credit report.

Credit Report
Your credit report states these vital pieces of personal information (DO NOT let other people in on your personal finances. This should be a give-in by now!)
• first and last name
• home address
• social security number (SIN)
• credit cards
• loans
• how much money you owe
• whether or not you pay your bills on time
All this ‘credit’ talk is important because it allows lenders to determine IF they will lend you money. Your lender, whoever you choose to go with, will be on your credit situation right away. The sooner you know what is on your credit, the better!
As for your credit score, it’s best to only have it checked once as having multiple credit check by different lender can cause it to change. Let us know. We’d be happy to help here.

Employment
It is important to have a steady income and also proof of employment for the last two years. Any changes to your employment have to be explicitly explained. Gathering these documents a head of time can save headaches later.

Down payment
In Canada, you need to show a 90-day history of the down payment to prove you have not borrowed the money. We will need to see any movement of that money within the 90 days so its best not to move it around. You are allowed to get a gift from family for the down payment but this money must not be repayable and we will need a letter from that gift giver explaining that!

Consult Your Wish List
It’s good to know what you want in a home if you can do it realistically. Buying a house for two? Thinking of expanding your family? You need to consider what life will look like down the road before you commit and sign that paper. Nothing would be worse than to move into a house that eventually ends up being too small because a couple of kids came into the picture or in a similar situation those grown-up kids come back home from college, university – you get the picture.
It’s also reasonable to think about factors in your dream home such as maintenance, renovations, the longevity of your stay, etc. Cover all bases, it is way better to be safe than sorry.

Finding a Broker
Who should you use to find the best mortgage for you? We think a Broker (like us), especially if you’re a first-time home buyer. There are many lenders in Canada and a broker will be able to sort through all your options.

Finding a Realtor
When it comes to a realtor, you want someone reliable. Makes sense right? A couple ways you can find out whether or not a certain realtor is legit is by doing some online research:
• Do they have a website/social media accounts? Go check it out!
• Double-check if their licence is registered and legitimate
• Look up their client feedback/disciplinary comments against them
• Check out their current listings – price range, are they a busy/relaxed business?
• Send them an e-mail with any questions! Do they have the appropriate knowledge?

Feeling better about buying that first Home? That’s exactly what we like to hear. If you have any other questions, call a Dominion Lending Centres mortgage professional today.

Whether you are buying your first home or have been a home owner for years, when you are looking at purchasing a property, finding the best mortgage solution for your specific situation can be an intimidating experience.

Working with a licenced mortgage broker will ease that tension, along with knowing the basics of what lenders are looking for will help you better understand the process.

The Five C’s of Credit/Mortgages
The five Cs of credit is a system used by lenders to gauge the creditworthiness of potential borrowers. The system weighs five characteristics of the borrower and conditions of the mortgage, attempting to estimate the chance of default and, consequently, the risk of a financial loss for the lender.

Higher Risk = Higher Rates!

Know Your 5 C’s:

Every client has individual mortgage needs when buying a home and my goal is to find a mortgage loan that’s right fit for your situation! The first step in getting the mortgage process started involves understanding what lenders are looking for in order to get mortgage approval.

The approval process is called the Five C’s of Credit and they consist of:
• Collateral– the property that you are planning to purchase
• Credit – do you have good credit? Do you have a good history of repayment for all loans?
• Capacity – Proof of being able to pay for your mortgage with your provable income
• Capital – How much equity do you have in the property? The borrower’s net worth
• Character – The borrower’s willingness to repay the loan and their reliability

1. Collateral
Collateral reflects the strength of the property itself. Lenders look at if the property is owner occupied (do you live there) or is it a rental dwelling? Is the property a home, condominium or cottage? Is the property located in a metropolitan neighbourhood or a rural area? Is there a single family living in the home or multiple families? All these factors are considered by the lender for marketability when rating your property. An appraisal is one of the tools that will be used to assess the value of the property.

2. Credit
Shows the lender a snapshot of what the borrower’s repayment history has been over a period of time. This is the only way a lender can predict the borrower’s propensity to make future payments. The credit score (also called credit history, credit report, credit rating) is the primary measurement factor.
When you borrow money, your repayment history is reported to the credit bureau – this rating is called your credit score. How do you pay your bills – always on time or sometimes a few days late or not at all, will determine what type of credit rating will apply. Some other factors that affect your credit rating are if your credit card balance is greater than 25-50% of your credit limit, if any accounts have gone to collection, or if there have been multiple inquiries into your credit.

3. Capacity

The most important by far! How are you going to pay for your mortgage? The lender’s main concern is how you intend to repay your mortgage and will consider your income (from all sources) against your monthly expenses. Proof of income will differ depending on your employment status: salaried, commissioned, self-employed, full time, or part time. Lenders will determine what types of documents are required to confirm your provable income and how much mortgage you can qualify for. This is represented as TDS Total Debt Service Ratio and GDS Gross Debt Service Ratio.

4. Capital
Capital refers to your personal net worth and how much equity you have in the property. Where is your down payment coming from? In Canada your minimum down payment is 5% for a “high ratio” insured mortgage* or a “conventional” mortgage with 20% down. The downpayment money can come from your own resources or can be gifted from a family member.

5. Character
Character is a subjective rating and basically reflects a combination of the above four factors. Your character tells a story to the lender about your individual situation. Lenders want to know that as a borrower, that you are trustworthy and will meet your payment obligations to them. Lenders will take factors such as length of employment, your tendency to save and use credit responsibly to establish your character and determine whether you are a borrower that they can trust with their mortgage.

The goal is to get a yes with your lender. The Five C’s of credit outlined above determine a borrower’s ability and willingness to make payments. Understanding what a lender is looking for allows you to set yourself up to put your best foot forward.

There you have it – the 5 C’s that lenders analyze when reviewing a mortgage application.

If you have any questions or concerns feel free to contact a Dominion Lending Centres mortgage professional, they’re here to help!

Bank of Canada Update

The Bank of Canada (BoC) raised its trendsetting interest rate by a quarter percentage during its latest rate meeting Wednesday – bringing the benchmark to 1.75%.

This was an expected hike, as The BoC and economists had hinted at another increase this year. The new United States-Mexico-Canada Agreement (USMCA) – formerly known as NAFTA – pretty much sealed the deal for a hike this month as it settled a large source of trade uncertainty.

The key rate has been raised five times since June 2017 – to 1.75% from 0.5% – and is at its highest in nearly a decade.

Overall, rates are expected to gradually increase over the next couple of years, returning to more normal levels, since rates have been near historic lows for several years.

This means now’s the perfect time to start home shopping if you’re in the market for a new property and/or examine your debt levels. Pay particular attention to unsecured debt such as credit lines that are impacted by rising rates as well as high-interest credit cards.

Answers to your questions are just a call (705) 691-7646 or email rodney@ndlc.ca away.