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By Amber Stuart

In today’s economic climate of tighter credit requirements and increased unemployment rates taking their toll on some Canadians, there’s no doubt that many people may not fit into the traditional banks’ financing boxes as easily as they may have just a year or two ago.

Your best solution is to consult your mortgage broker to determine whether your situation can be quickly repaired or if you face a longer road to credit recovery. Either way, there are solutions to every problem.

The following are five steps you can use to help attain a speedy credit score boost:

1. Pay down credit cards. The number one way to increase your credit score is to pay down your credit cards so you’re only using 30% of your limits. Revolving credit like credit cards seems to have a more significant impact on credit scores than car loans, lines of credit, and so on.
2. Limit the use of credit cards. Racking up a large amount and then paying it off in monthly instalments can hurt your credit score. If there is a balance at the end of the month, this affects your score – credit formulas don’t take into account the fact that you may have paid the balance off the next month.

By Amber Stuart

What is the Home Buyers’ Plan (HBP)?

The HBP allows you to withdraw up to $25,000 from your RRSP to buy or build a qualifying home. You can make withdrawals from more than one RRSP as long as you are the annuitant (plan owner).

Your RRSP issuer will not withhold tax on these amounts when you withdraw the money. You are required to repay the withdrawals to your RRSP over the next 15 years in installments or alternatively some portion will be included in your income each year and you will be taxed on it.

By Amber Stuart

It’s becoming increasingly apparent that a greater number of women are now taking the reigns when it comes to home purchases. There’s a growing trend among single women – and more precisely professional single women – who are becoming independent homeowners.

Creation of shows like HGTV’s Buy Herself, which follows single women making their first real estate purchases, shows many of them may be putting off marriage but they’re not waiting around for Mr. Right before taking the plunge into homeownership.

By Amber Stuart

When you’re considering the purchase of an MLS listed home, the hope is that the listing agent has done a thorough market analysis and has listed the home for sale at fair market value.

However, sometimes a purchase price is inflated by the seller to create room for bargaining with potential buyers. In this case an appraisal will let a buyer know what a reasonable sale price is.

Conversely, many home sellers will price below market value to encourage multiple bids. A multiple offer situation can drive the purchase price up quickly; even beyond market value. In this situation, as a buyer, it’s a good idea to have an appraisal determine what the market value of the home is to establish a walking away point if necessary.

What will a lender look at when qualifying you for a mortgage?

Lenders generally look at five factors, often called the 5 C’s of Credit, when determining whether you qualify for a mortgage:

1. Character: will you repay the loan? Lenders look at such things as your employment tenure, your current living arrangements, your business experience, and your educational background etc. Basically, the lenders want to see what life choices you’ve made up until now and if that illustrates that you will take your loan obligation seriously.
2. Capital: How much of your own money are you investing (your down payment) in the property? Statistics show that the more you contribute to your purchase the greater likelihood there is that you’ll maintain the loan.

By Amber Stuart

Purchasing a home is one of the biggest decisions most people ever make. It helps to look at the pros and cons of buying to determine whether home ownership is right for you.

Disadvantages:

• A home can be an expensive purchase. Your monthly payments may be more than what you are currently paying in rent when you factor in your mortgage payments, property taxes, house insurance and maintenance.
• Owning a home ties up some of your cash flow and is likely to reduce your flexibility.
• While your home might increase in value as time goes by, a big return on your investment during the first few years isn’t likely.