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March 2010

1. Establishing Credit History
2. Tips to Consider Before Buying a Home
3. Real Estate Humour
4. Groundhog’s Spring Prediction

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1. Establishing Credit History

In order to purchase a home, you must have an established credit history. Each time you pay a bill (for your credit card, line of credit, etc ), you are establishing a credit rating for yourself. A credit rating is a number or score that banks, mortgage companies, and other lending businesses use to assess your level of financial responsibility.

Paying your bills on time every month, contributes to having a good credit rating. If you miss payments, or are often late making your payments, your credit rating is probably not as good, and money lending institutions will consider this when you apply for a loan. Numerous factors contribute to your overall credit score, such as outstanding debt, payment history, severity and frequency of derogatory credit information, and the amount of credit you use compared to what you have available.

Also important is the length of your credit history. For many immigrants, this only begins after entering Canada.

To begin to establish a credit history:

• Open an individual savings or chequing account in your name. From this account, your deposits, withdrawals, and transfers will demonstrate that you can handle more efficiently and responsibly.
• Applying for a smaller loan demonstrates responsibility, and will positively affect your credit rating over a longer term, once you demonstrate that you can make timely and consistent payments.
• Other forms of credit include department store and gasoline credit cards. These are generally easier to obtain than major credit cards and, if used responsibly, can also serve to enhance your credit rating.
• In short, there is no quick way to establish credit. It is much better to go slowly and develop a strong credit record than to apply for too many credit cards or a loan that is larger than you can handle. Mortgages are long-term commitments, so appreciate that lenders will need proof of longevity and consistency.

Your Credit Rating Once you’ve begun establishing your credit history, it is a good idea, and your right as a consumer, to know exactly what your credit rating score is, even if you always pay your bills on time. In Canada, Equifax Canada and TransUnion are the two major credit rating companies and will give you a copy of your credit history and overall credit rating score, usually for a fee.

In the event your credit score is low, we have a program called Scoremaker that analyzes your score and tells you how to correct it. Please contact Jessi Johnson for more details. (Source: Genworth Financial & JJ)

2. Tips to Consider Before Buying a Home

You’re about to invest in your most valuable asset. Below are our top 8 recommendations to make you more confident as you start your home buying journey.

1. Your Credit Rating Getting your finances in order is probably the most important step you should take. You must know exactly what your credit reports say about your financial history before you apply for a mortgage, because the reports play an important role in the mortgage approval process and in determining the interest rate and other loan terms that a lender offers you. If you are working with a broker, they will analyze this for you.
2. Understanding How Mortgages Work Get familiar with the mortgage laws, structure and options. That way, you will be able to decide on the right loan and lender – crucial to your home buying success. It’s up to your broker to determine which lender is best for your needs, and it’s always a good idea to have at least a bit of background about the loan process.
3. Getting a Rate hold and Document approval Do you know how much house you can afford? Probably not, unless you’ve talked to a bank or broker. Part of the pre-approval includes obtaining a rate hold which is crucial in this market. A broker rate hold can protect you for 120 days. Having your bank agent or mortgage broker review all your documentation is also key in reducing your stress load down the road.
4. Sorting Out Your Needs and Wants Buying a home isn’t as difficult as you might think, even if you’re short on funds. But the process will go a lot smoother if you get familiar with your real estate market and narrow down your wants and needs before you start looking at houses.
5. Preparing to Work with Real Estate Agents Real estate agents represent buyers, sellers, or both. It’s essential to understand agent duties and loyalties before you make that first phone call.
6. The Great Home Search The Internet is a great tool – you can spend endless hours searching the public version of the Multiple Listing Service website. You can also pick up House For Sale magazines and read classified ads in your local newspapers. You might even plan an afternoon drive to preview neighbourhoods. These are all excellent ways to see what’s available out there but why not leave that work to your realtor? Your realtor will see listings days before you can, this is very important in a hot market.
7. Making the Offer There’s no one set of instructions that can cover all the differences in real estate laws and customs that exist throughout, so its important to meet with your agent, attorney or advisor to fine-tune your offer and take care of all the contractual considerations.
8. Property Investigation Deciding whether or not you want to buy a house involves a look at its structure and its features, but there are many other topics that are every bit as important to your purchase. Appoint a professional to conduct the home inspection. Study what kind of house it is and consider its market value before removing subjects.

(Source: hgtv.ca & JJ)

3. Real Estate Humour

4. Groundhog’s Spring Prediction

The groundhog, often called a woodchuck, is the only mammal to have a day named in his honour. The groundhog’s day is February 2. Granted, it’s not a federal holiday but still, to have a day named after you is quite a feat. How did the groundhog come by this honor? It stems from the ancient belief that hibernating creatures were able to predict the arrival of spring time by their emergence. Traditionally, the groundhog is supposed to awaken on February 2, Groundhog Day, and come up out of his burrow. If he sees his shadow, he will return to the burrow for six more weeks of winter. If he doesn’t see his shadow, he remains outside and starts his year, because he knows that spring has arrived early. (Source: Wilstar.com)