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Dear ,
The Bank of Canada hiked its key interest rate by a quarter point on July 20th for the second month in a row! The big 5 banks quickly followed by raising prime to 2.75%.
With
every 25 basis point increase you can expect $12-$15 dollars per
$100,000.00 in mortgage amount if you carry a variable rate mortgage. For example, if you have a $400,000.00 mortgage, your payment will
increase by as much $60/per month.
In
its statement last Tuesday, the Central Bank noted that it "expects the
economic recovery in Canada to be more gradual than it had projected
in...April, with growth of 3.5 per cent in 2010, 2.9 per cent in 2011, and
2.2 per cent in 2012. This revision reflects a slightly weaker profile
for global economic growth and more modest consumption growth in
Canada."
"It was a pretty dovish statement, more than we expected. But they still referred to rates still being at stimulative levels, so
we think they'll raise rates at each of the next two meetings in Sept.
and Oct., by 25 points each," before pausing in December as the economy
slows, said Krishen Rangasamy, an economist with CIBC World Markets in Toronto. Without a move towards higher rates, "you risk having inflation running out of control."
Fixed
rates have seen little pressure to increase in the past 6 weeks and
it's surprising to me that they haven't come down even further based on
the bond yield spreads that just seem to keep growing and keeping the
big banks happy.
That's not to say that this won't change at any moment,
up OR down! If
your mortgage is coming up for renewal in the next year, you would be
quite wise to explore the option of an early renewal (or refinance to
consolidate some debt) with us. Call us to do a no obligation "check-up"
on YOUR mortgage.
Click here for current rates.
In the past few months we've run a number of blog posts about Credit Scores,how important they are and how easy they are to damage.
An article on the CBC News site tells the story of an ordinary Joe, who had a
great credit score. Then he got married and moved. Months later when
applying for a mortgage, the newly wed couple found out that his credit
score was the pits. Why? When he moved, he failed to close out an
account and didn't purchase Canada Post's mail forwarding service. The
bills kept on mounting and he didn't know about it ... until he applied
for a mortgage.
We have run into this type of situation far more often than you might
think. Clients come in thinking they have great credit scores only to
find out they don't.
The article below talks about some of the common ways people can damage their credit scores
As always, if you have ANY questions about getting a mortgage, renewing or refinancing, we are here to assist you.
Sincerely,
Mike Averbach and Justin Blacklock
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How To Destroy Your Credit Rating
Think you have a great credit score? You could be dead wrong! There
are many ways to drive your credit score down fast .... some of them
don't take any effort at all!
Here are a few examples:
One young lady collected a few tickets from a parking lot she thought
ought to be free. She trashed the tickets saying, "Who do they think
they are? They're not the police." Turns out the parking lot guy
doesn't have to be the police.
A very NOT nice young man kicked out his live-in girlfriend just before
going on a six-month trip "to find himself." He sent a buddy to oversee
the girlfriend's move-out. The buddy didn't pay attention when the
girlfriend picked up the phone saying, "I've got to let someone know
I'm on my way." Turns out she phoned the 24/7 weather advisory in Tokyo
and left the phone off the hook. The phone company eventually
disconnected, but only after they'd made a few thousand bucks.
An older gentleman was in an accident and had to be carted away by
ambulance. He was very grateful that ambulances existed, and honestly
thought that he didn't have to pay the bill. He figured it was all
covered by his Provincial Health Care plan. Turned out he was wrong.
Even though their best friends advised against it, Mom and Dad figured
their kids were "good kids" just going through a bit of trouble. They
co-signed a loan. Turned out their kids were deadbeats.
There are hundreds of similar stories -- some funny, some sad, some pathetic, but all ending in damaged credit ratings.
Over 30% of your credit score is based on your bill payment history.
It's not a big surprise that not paying your bills period, or not paying
your bills on time will affect your score, but did you know that the
following can also impact you negatively?
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Paying the minimum or less on your credit cards.
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Maxing out your credit cards. You should keep the balance on your cards
as low as you can. Do your best not to go over 70% of your limit.
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Collecting a stack of low limit credit cards. You are better off having one or two cards and upping the limit on them.
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Closing out your long-term established credit accounts and opening new
ones. Good long-term credit history is a plus factor. Don't close long
established accounts. If you think you can get better rates elsewhere,
try negotiating with your long-term account first.
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Applying for multiple credit cards in a short time period triggers a warning signal that may negatively affect your score.
Let's say you are doing it all right:
you pay your bills on time
you have one or two credit cards with no or low balances
you have established yourself as a great credit risk by taking out a loan and paying it off
you don't have hinky girlfriends or boyfriends
you make sure all your auto-pay creditors are informed of changes when your credit cards are renewed
you make sure you notify all creditors of change of address when you
move. Better yet, you pay Canada Post for a year of mail forwarding.
you don't co-sign loans to financially stretched friends, relatives, or
children unless you are prepared to take up the slack if they can't pay.
You could be a perfect consumer and STILL be hit hard.
Identity theft is an increasing problem that can have a huge impact on
your life and your credit. For simple, basic protection, get a shredder
and get in the habit of shredding everything with your name and address
and any other personal information on it. Be careful about who you
give your personal information to. No one needs your social insurance
number except the banks, so don't give it to anyone for any reason.
We've just touched the surface about protecting your Credit Score in
this article. Keep visiting the Averbach Blog for more information.
If you are considering a home purchase or a change in your mortgage, be sure to contact us well ahead of time. We can advise you on your credit score and let you know if there is a problem and how it will impact you.
Call Now: 604-736-1855
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Averbach Mortgages
604-736-1855
We save you time. We save you money. We get you the you the best mortgage terms at the best interest rates possible.
If you are:
- purchasing your first home
- refinancing
- renewing an existing mortgage
- investing in real estate
- consolidating your debts
- experiencing current or past credit issues
We have the solutions that work for you.
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Mike Averbach
Averbach Mortgages |
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