How To Improve Your Credit Score

  
Are you being denied for all types of credit? Has that cell phone bill come back to haunt you? Now is the time to finally face it head on and deal with your credit score.  A very daunting task but a task that must be done.

 First you need to know what is in your credit score is all about:
payment history
amount owed
length of credit history
new credit
types of credit used

What can you do to improve it?

Whatever you do it will take some time. It will take patience as you plow away at those credit cards, getting them down to a much lower balance.  All that money just disappearing into those credit cards.  But, in the end you will see it will be worth while and no one will deny you a car loan  or even a mortgage ever again.

A little secret that not many people do not know is that whatever your limit is on your credit card, you should not owe more than 50% of that limit.  So if your limit is $1000.00, the card should never have more of a balance than $500.00. In fact it is better to have 2 credit cards with no more than 50% owed on them than have 1 credit card maxed out.  Go figure.

 What else can you do?

 Make sure you make your payments on time.  Credit companies record when you have late payments.  This is very important. Set up payment reminders.

 Don't close your unused credit cards.  If you must close a credit card close the one that is the newest. It is all about having and managing long term credit is what the lenders want to see,

Check your credit report.  They do make mistakes. Birthdates seem to be a popular one that they input wrong. If you are being denied credit and you believe your credit rating is great order a free report, go over it, making sure all the information is correct.

Store credit cards are not as good as mastercard,visa or american express.  Also store credit cards usually charge you a higher interest. To get a mortgage the lenders/banks like to see at least 2 credit lines in good standing.

Remember , it is all about managing your credit.  Everyone hits a point in their life when for whatever reason the credit managing slides. Could be a divorce, job loss, moving, marriage, etc.

Do you have questions about your credit score. Contact me and I will help you sort it out.


    

Angela Kroemer, AMP

Mortgage Professional

TMG The Mortgage Group Canada Inc.

TMG Sharie Marie Mortgage Team

Local: 1.250.650.4182

TFP: 1.888.679.0190

Fax: 1.888.679.0192

akroemer@mortgagegroup.com

www.KROEMERmortgages.com

 

Fixed Rate or Variable Rate......has the choice become easier?

September 29th 2011

The age old question facing consumers, do I take a fixed rate or variable rate......and a similar dilemma facing mortgage brokers as their clients ask them for advice on which option to take. We all know it depends on the client’s appetite for risk, affordability, cash flow stability, etc. however statistics have shown that taking a short term or variable rate has predominantly, but not always, been cheaper than take a longer fixed rate mortgage.

We maybe in or coming to an interest rate environment when taking a fixed rate or a hybrid mortgage (50/50) may actually be cheaper than staying in a variable rate. Why you ask.....let’s look at the facts as to why this maybe a good time to take a fixed rate or hybrid mortgage.

1. 5 year fixed rates are at the lowest levels in history, we have never been this low.....3.39% are available through many lenders and 2.99% for a 4 year is very attractive.

2. The gap between a prime - 0.40% (2.60%) and 5 year fixed rate (3.39%) is 0.79% and (in some cases even lower), this is down significantly from 3 to 4 months ago when the gap between a 5 year ARM and 5 year fixed rate was as high as 2.00%. If we consider a 4 year fixed rate at 2.99% versus ARM of 2.60% the gap is only 0.49% or two quarter point increases in prime.

3. You can’t predict when to time a conversion from ARM to Fixed rate, especially in a volatile market. Fixed rates have a tendency to move ahead of variable rates....when variable rates begin to rise the fixed rate has already gone up and if you convert you maybe converting at a much higher fixed rate than today’s rates.

No position is complete without looking at the counter arguments’, in other words why a client should consider a variable rate versus fixed rate mortgage. Once again let’s look at the facts.

1. Bank of Canada has indicated it is not looking at raising the overnight anytime soon or at least will hold off until such time as it sees the economy improving

2. There is no indication that inflation is increasing, therefore supports point 1 above.

3. U.S. has no plans to increase rates for the next two years making it more difficult for Canada to raise rates unless the Canadian economy is growing in spite of the U.S. being sluggish

4. Canada is becoming a safe haven for investors’ thus larger demand for Canadian bonds. This demand is keeping bond yields down thus lower fixed rates on mortgages.

Both positions have merit and no one has a crystal ball, however, if we continue to see the gap between fixed rate and ARM rates shrink then the risks of taking a variable rate versus fixed rate increases substantially. The risk being that ARM rates could increase higher than .79% % over the next 18 months to 24 months, therefore over the course of a 5 year term the fixed rate may actually be less costly than the ARM rate. If the gap between ARM and fixed gets is 1% or less, I believe the smart money would go to fixed rate versus ARM. If the gap between ARM rate and fixed rate is between 1% and 1.50% then a 50/50 mortgage maybe the best bet. If the gap between ARM and fixed rate is in the 1.50% to 2.00% range then ARM rate maybe the way to go. Based on the present volatile market conditions it is hard to predict or say what will happen, this volatility, is the biggest wild card and probably the main reason I personally would be taking a fixed rate or 50/50 versus an ARM, a bird in the hand (fixed rate) is better than two in the bush (ARM rate).

Fixed Rate to ARM Gap *	Primary Product Selection
less than 1.00%	5 year fixed rate
1.00% to 1.50%	50/50
1.51% or higher	5 Year ARM

* difference in rate between a 5 year fixed rate and 5 year ARM rate

 John Bordignon
EVP, Strategic Development, Paradigm Quest Inc.
Office: (416) 366-8606 ext 2294
Thank you
Angela Kroemer Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com
www.ComoxValleyMortgagesToday.com
TMG The Mortgage Group Canada Inc.

About Mortgage Brokers

As mortgage brokers we do not work for a bank.  We work for a Mortgage Broker that owns the firm and that firm goes out to secure Lenders that will work with mortgage brokers from that firm.  It is like working in a mall with only Lenders as occupants.  The people working under the mortgage broker firm are known as sub brokers.  But since alot of people don't know that term you will see other terms like mortgage professional, specialist,expert,agent (in Ontario)and consultant.  They all mean the same thing .  Mortgage sub Broker.

Now to be a sub broker you must pass a course and an exam. You must apply to FICOM which is a government agency over looking the mortgage brokers.  They check out your past including credit, criminal and work history.  Once you have past this scrutiny then you become registered as a sub broker.  Being a sub broker you are tied to uphold ethics of this profession or you will lose your licence.

A sub broker that is licensed in BC can write mortgages anywhere in Canada. Our training is so through that we can pass any provinces standards.  Which gives us a huge market to choose from. 

Canada is very proactive in keeping the mortgage broker profession , professional.  We are required to keep educating ourselves each year by participating in online courses, trade shows, and seminars.  We are encouraged to get our AMP designation with means Accredited Mortgage Professional. This means we do even more education. The brokers that are over achievers are in this group. They go that extra mile for their client.

I get comments from some people stating that the mortgage brokers in the United States were all crooks.  From the news reports you would think so cause they never reported on a good mortgage broker, no news worthy story there.  What happened in the United States is that in most States you did not need a license. That lead the way for many not so nice people to take advantage of many nice people. 

In Canada the government being the way they are , are proactive in not having this industry go bad. We have seen what bad looks like in the United States from a few years ago.
That is why we have to pass exams and continue our education, which is documented if you have the AMP designation.  We are strictly regulated. 

The whole mortgage profession encourages the public to come forth if they think they are dealing with a sub broker that doesn't seem like they are doing their job or you have an uneasy feeling about the job they are doing. 

You the client always comes first.

Where can you get more information about Mortgage Brokers?

MBABC ---http://www.mbabc.ca/
CAAMP --http://caamp.org/index.php

FICOM ---http://www.fic.gov.bc.ca/
TMG ---http://www.mortgagegroup.com/site/bc/brokerpage.asp?id=3011
My website ---http://cvmortgages.ca/

Canadians Realistic About Household Debt

In the past decade consumer confidence in Canada was much higher than what would be expected based on certain household fundamentals including Real Disposable Income Growth, Debt-to-Income Ratios and Consumer Capability Indices. It appears that pre-2008, consumers were confident they could increase and manage their household debt when indicators pointed against this.

Then, since the global financial crisis of 2008, Canadian consumers have become more realistic about their debt. Yes, they continue to borrow; however, the pace of that borrowing has slowed down. This change in mindset is happening during a time when their capacity to manage their debt has increased.

A recent report by economist Benjamin Tal of CIBC, analyzed this new trend on seven household fundamentals. He found that as of the second quarter of 2011, the Consumer Capability Index was back to the level seen before 2008, with the gap between confidence and capability narrowing notably, relative to the wide gap seen during most of the decade. This improvement in the capability index was not due to a strong growth in income but reflects the fact that while the level of the debt-to-income ratio is still rising, the speed at which it is, in fact, slowing.

"The key here", Tal wrote, "is the notable softening in the pace of growth in personal non-mortgage credit which is currently expanding at the slowest pace since the early 1990s. In fact, the ratio of consumer credit to disposable income has been stable over the past year."

According to the report, other factors contributing to the recent improvements include:

1. A higher savings rate which, while easing lately, is still double the rate seen before 2008
2. Personal bankruptcies are down
3. Relatively low and stable debt service costs
4. A stabilizing long-term unemployment rate at a relatively low level

"While consumers will continue to take advantage of historically low borrowing costs," Tal said. "The practical implication of their more realistic approach is that spending in the near future will be slower but more balanced growth as it will be based on fundamentals as opposed to wishful thinking."

as per TMG website

Interest Rates-- Mortgage Brokers vs Banks

Why is it Mortgage Brokers can often offer lower rates than Banks?

Mortgage Brokers have several Lenders to choose from.  At any time at least 1 Lender  has a rate on sale , so to speak.  With TMG we have over 50 lenders to choose from. Not all Lenders will be a  fit for every client.  Each Lender has their own policies. Some look for excellent credit, some look for fast closings, some look for okay credit and it is as varied as there are Lenders.

While the Bank only has one to choose from.  Themselves. 

The best way to find out which rate you qualify for is to sit down with a Mortgage Broker and fill out an application.  The bonus with using a Mortgage Broker is they only have to check your credit rating once for all of their Lenders which is over 50 with TMG.  Every time you go into a different bank they each have to check your credit rating which will take a small hit on your credit rating.  This is not the end of the world type of problem but do limit how many Banks do this as you want to be in the best position in your credit rating to get the best rates available. Rates are directly tied to your credit rating.

Once you have a free and no obligation quote from your Mortgage Broker find a Bank with great rates and get a quote from them.  If you really want to stay with your Bank they may match what the Mortgage Broker quoted you.  Not what we as Mortgage Brokers want to happen but our client comes first and we want to see our client happy and satisfied with any choice they make.  The end result is a client who is happy with their mortgage choices.

A sample of rates being offered is below.


                        RATE COMPARISON
 

Mortgage Term                    TMG Rate            Bank Rate
1 Year Open                          6.30%                     6.30%
1 Year Closed                        2.75%                    3.50%
2 Year                                    2.99%                    3.85%
3 Year                                    2.89%                    4.35%
4 Year                                    2.99%                    4.19%
5 Year                                    3.39%                    5.24%
7 Year                                    4.49%                    6.35%
10 Year                                  4.79%                    6.75%
All rates are provided for information purposes only and are subject to change at any time. All rates are calculated semi-annually, not in advance. E & E.O.

Why Refinance and go Through all that Hassel?

Very good question !!!  This article will answer questions as to refinancing to save money on your mortgage payments.

To alot of us refinancing is a major headache.  You start off checking all the banks rates and then the credit unions and then private lenders rates and by the time you decide on one lender all the rates have changed and you start all over again.
But, usually you give up and try again in 6 months or a year later, or when the 6 pm news tells you rates are down again.

If you contact a Mortgage Broker they do all that work for you and it is at no cost and no obligation.  The lender pays the mortgage broker.
Your broker will let you know if  you should refinance or stay at the rates you are at now.
The service is fast and takes all the stress away from you.  You know the saying "work smarter , not harder".   Mortgage brokers allow you to do this.

Why should you refinance:

There are a few reasons why you should look into refinancing.  The reason most people know is if the rates go down enough it is better for you to refinance.  You can have a lower mortgage payment, saving you money, or you may want to keep your mortgage payment at what you were paying and then pay off your house sooner.

Another reason not so well known is when you bought your house your credit rating was not perfect, which means to get your mortgage you had to pay alittle extra because you could not get the best interest rate.  But now since you have been paying on the mortgage and all your other bills on time your credit rating is much better, now you can qualify for the best rate.  Saving you money.

When buying your house you just went with what the bank offered you as the interest rate.  Most banks will offer you a higher rate because they know that you will go along with it because you are not a seasoned home buyer.  You were just happy to get a mortgage and questioned nothing. Taking a good look at your mortgage may reveal this and now because you have a mortgage broker on your side you can get better rates, saving you money.

If you fit into any of the above categories, contact me.  I will go over your mortgage and let you know if you should refinance or stay where you are.  No cost--No obligation.

There are other reasons to refinance so that you can buy something in return using the equity that you have built up in your home.
Such as :
to buy investments
to go back to school
to buy another property
debt consolidation
financing a renovation
Combining 2 mortgage payments into 1


Angela Kroemer Mortgage Professional
1.888.679.0190
akroemer@mortgagegroup.com

CMHC Survey about Home Owners

A recent survey from CMHC says the vast majority of Canadians renew their mortgages with their original lender, but you can save thousands over the life of a mortgage by looking at competing rates from competing institutions and mortgage brokers.



I am a mortgage broker and may be able to save you money.
Contact me for a free check up on your mortgage.

akroemer@mortgagegroup.com
1.250.650.4182

Business and Computers

No one tells you that when you start up a business that you need a couple of weeks just to start up all those computer sites that is needed for you to network.

So I start up my new business. Perfect. I am so happy.
After all those months of studying.  All that time dreading the final exam. I am finally homefree.

Then people tell me I have got to start networking on the computer as well as face to face.
So I start on the computer.

Facebook was easy. Did that pretty fast.

I opened a web site, then came a blog, then twitter and I needed to buy domains.  I bought way too many domains but it was fun shopping for names and heck they were so cheap.

So next I was reading about adsense.  I need that for my blog and website, I tell myself.  Off to the adsense website I go. Get all signed up and everything is great.

Oh oh, something popped up about adwords. Get your message out there. I have a coupon for adwords-- I should use it I thought.  Adwords were alittle harder to start up, but yes I got it done.

It is a huge mistake to read stuff on google.  Cause linkedin.com showed up. If you want to be somebody then you got to sign up and fill out your profile.  There goes another couple of hours of my life.

Sending out emails I noticed I needed a signature.  So went to read how to get a signature done and did it.  Although with gmail that function doesn't work great when you want to reply or forward something but yet, I figured out how to get this done and work around that problem.

Got professional pictures done a alittle while ago.  I needed to send a picture out for my business cards.  Got a reply back that the resolution was not high enough. Spent a few hours trying to get the resolution up to 300 dpi without distorting the picture, cause I had to also make the picture smaller.  Paint the program just won't cut it. I had to down load another program and learn how to work it. Photoscape worked pretty good, but I wish their measurments were in inches.

I still need to work on my professional website and I did sign up for a course cause I thought I would be a little bored. Thank goodness I have 4 months to do it, I may need it if I find anymore web sites to join.

Now on to joining all the network clubs I should belong to.

Poor Credit ? Want to get a Mortgage?

Were you less than perfect with your credit when you were younger, cell phone bill got away from you, divorce that left your bank account empty, lost your job for awhile?  Life happens !
When the bank has said no to you, contact me.
I can show you the steps to get your credit rating up to get a great mortgage rate or I have lenders who will approve a mortgage with less than perfect credit rating.
It all depends on the circumstances.
With a lesser score you will be paying a higher interest rate but if you have a great sale on a house it still may be cheaper to own rather than to rent.

Contact me.
akroemer@mortgagegroup.com
  1.888.679.0190