Mortgage – Improve Your Credit

Are you having trouble obtaining a mortgage and would like some guidelines on how to improve you score? Here are 5 easy steps that you can take to build credit and a few ideas on how to properly use your credit.
Build Credit
1. Obtain a Secured Credit Card – this is the easiest way to establish credit as there is no risk to the lender because the money you are spending you have already put the cash out front to cover you balance. Once you can prove to the lenders you can mange credit, they no longer require the security requirement and your cash deposit will be returned to you.
2. Gas or Department Store Card – these are extremely easy cards to obtain but you must pay the bills in the full amount on time as these cards tend to have an extremely high interest rate.
3. Borrow for an RRSP – borrowing money to use for an RRSP contribution which is to be paid back over the course of the year. This is easier to obtain as the lenders have access to the newly contributed cash so the rates tend to not be as high.
4. Obtain a Co-Signor – while it is not always the best idea to be a part of someone else’s debt, if it helps you obtain credit history and they are willing to co-sign for the card, do it. Make sure the card is in your name so that you are the one building credit.
Put up Collateral – if you can use something such as a GIC, you can use this to help you obtain credit as lenders value cashable assets.
Maintain Credit
1. Pay Bill on Time – having late payments on your bills will stick on your credit bureau for 7 years.
2. Low Balance – maintaining a balance on any of your credit lines of 60% or less of the total credit limit allowed will also work favorably to help increase your credit.
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Why Use a Mortgage Broker

Homebuyers looking to purchase a new home often go to their bank to attain mortgage financing assuming they will be offered the best rate. This is often not the case as banks generally do not offer the best rate up front even for their existing clients. Not only will they not offer you their best rate but you will also be required to meet the banks individual lending criteria. This includes debt servicing ratios, credit scores and income qualification with each bank having their own specific guidelines.

An independent mortgage broker, such as myself, adds a beneficial service to my clients by possessing the ability to “shop” around with your application to the many lenders in order to find the best rate and product. The mortgage lenders available to me go beyond the major banks and include institutions that will only deal with brokers, such as Merix Financial, Street Capital or First National.
What is your time worth?
Rate shopping for a mortgage should be just as important as searching for real estate. Not often would you only look at one property and make an offer without seeing what else is out there; well the same goes for financing. If you only go to your bank and don’t at the very least look at comparable options, you would be doing yourself a disservice. By choosing to deal with a mortgage broker, I can do the rate shopping for you which not only will save you time but will also potentially save you a lot of money in interest payments.
If you decide to do the rate shopping on your own, this will entail setting up meetings and having every different bank pull your credit score, which will end up lowering your credit. The bonus of using a mortgage broker is that they only pull your credit once and use that score as part of your application. This will help you maintain your credit score.
What do I charge?
Unless your credit is so severely damaged due to a recent bankruptcy and you can only obtain private financing you do not have to pay me a fee as I collect a referral fee from the lending institution.
If you have any questions with regards to your current mortgage or if you want quotes on mortgage rates, I encourage you to contact me.
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