Posted in Applying for a mortgage - Lisa Alentejano services the interior, Bank VS Broker, BC Mortgages, Canadian Housing Market - Lisa Alentejano, Canadian Mortgage News, Credit Scores, First Time Home Buyer Steps, fixed or variable rate or both, Fixed rates, Hombuyers Downpayment, Home Buyer Closing Costs, Home Loans, Interior home mortgage, Interior Mortgage Expert - Lisa Alentejano, Interior Mortgages, kelowna mortgage, Kelowna Mortgage Broker, Kelowna Mortgage Financing - Lisa Alentejano, Low Interest Rates, Mortgage Affordability, Mortgage by Lisa Alentejano, Mortgage Playground - Lisa Alentejano, Mortgage Consultant, Mortgage Rates, Protecting your biggest investment your mortgage, rate fixed mortgage, Save your money, Why use a mortgage broker

BANK VS BROKER

Buying your first home and getting your first mortgage can be an overwhelming experience.

If this is your first home buying experiencing, applying for a mortgage can be the most intimidating part of the process , so where do you start?

In the past, the home buyer turned to their banks for their mortgage needs, but now you have more options at your disposal with over 40% of consumers turning to mortgage brokers for their mortgages needs instead of the banks.

Mortgage brokers are provincially licensed and regulated by CMBA .   They can help you with all aspects of a mortgage, from figuring out how much you can truly afford, to determining the best mortgage product for you, to finding ways to save you money and pay off your mortgage faster.

Many lenders’ rates and mortgages can only be accessed through a mortgage broker. Not having the selection of lenders, and simply choosing to get a mortgage with a bank, can mean choosing harsher prepayment penalties for breaking your mortgage in the future, as well as a higher interest rate; which can cost buyers thousands upon thousands of dollars over the life of their mortgage.

A mortgage broker is also able to better tailor a mortgage product to your specific needs, whether that be working with a lender who is more flexible when it comes to self-employed income; one who has more flexible prepayment terms; or one that has more options for consumers that possibly have suffered some credit challenges in the past.  Because mortgage brokers have access to more lenders, they’re better able to find a lender and a mortgage based on your specific needs and financial situation to get you the lowest mortgage rates today.

Mortgage brokers offer convenience, which lets you meet around your schedule, not the banks hours.

Mortgage brokers also operate on commission and are paid by the lenders who ultimately grant you your mortgage, so there is no cost to the consumer.   Referrals are the life blood of our business so it is in our best interest to serve you as best we can.

Bottom line,  using a mortgage broker gives you the freedom of CHOICE and comparables to consider, using a bank gives you no other choice but ONE, theirs.

Feel free to contact me with any questions you may have at 1-888-819-6536 or lisa@mortgageplayground.com

 

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Posted in Canadian Economy, Credit Scores, Debt, First Time Home Buyer Steps, Home Equity, Kamloops broker, Kamloops mortgage consultant, kamloops mortgage financing, Mortgage Affordability

Young Money, Striking a balance after graduation

A great read here for you.  Finances, savings and investments for the future seems to be the furthest things from our young peoples minds after graduation.  Its a great opportunity to start education our younger generation before they graduate and introduce them to simple and small steps on how to apply and build their credit, saving for their future and what it takes to apply and be approved for a mortgage later down the road when they need one.

Personally I would love to see a mandatory life skills/financing course be offered earlier on in life, like high school, to teach and prepare our younger generation on these important topics.  Its sets them up for success later on in life and teaches them the importance of managing credit early on.  Its also a good time for us as parents to take the lead role and have a conversation and teach our kids the importance of managing money and credit responsibly.  I’m guessing that alot of us simply leave it for them to figure out on their own.  Here is a great place to start, simply click on the link below, here you will find numerous topics of interest to help guide you about, the best bank accounts that are free,  the lowest rate credit cards, mortgage calculators and the list goes on.   Of course if you have any questions about financing or credit, please feel free to contact me directly.

http://www.fcac-acfc.gc.ca/eng/default.asp

University graduation is a significant milestone. Being a student means a few things; studying hard, spending frugally, developing friendships, sleepless nights, and dreaming of what’s next.

It only seems right that graduation be the end culmination of some of these habits. With year-round employment income, no longer does one have to pass over the weekend Vegas trip, the spring break in Mexico or the purchase of a new car. Right?

As a financial advisor, I am fortunate to meet a significant portion of the population who have recently completed their studies, they’ve landed their first job and they’re eager to continue learning, with a newfound emphasis on personal finances. In our industry, for the benefit of the individual, it is common to place individuals amongst various stages in the financial life cycle. Placement in these stages is broad, but adequate, and helps bring clarity to preparation for tomorrow and beyond. For ease purposes, let us consider a recent graduate, an occupant of the “young adult” life stage. Young adults are currently employed and have little monthly expense obligations. What is most important for young adults is considering the near future, for most, marriage, home purchase and children are on the horizon. These are three distinct life events that all come with significant financial consequences, this next stage entails some of the largest expenses one is likely to incur in their entire life; the importance of preparation is obvious.

Young adults have a window of opportunity for great savings, though it is mainly true that these are their lowest income-earning years, expenditure obligations are also at their lowest. All too often individuals ignore this opportunity, lured instead by the vast availability of credit, nights on the town, vacations and all the newest consumer goods.

It’s easy to lack budgetary awareness when excess funds are only a credit limit increase away. In no time at all balances accumulate and instead of heading into the next life cycle stage fully prepared, they often go into it well-behind, strung down by these outstanding balances and sometimes even a poor credit score. Down the road in this instance, seeking a mortgage approval to house a young family becomes a fierce obstacle, not to mention the difficulty in saving for a down payment. Why not go into that stage armed and ready. Having significant savings and a clean slate of credit can mean a quick approval, possibly a larger down payment, significantly decreasing the interest one pays, unlocking even more savings.

This solid financial foundation may also put one in the position to bargain for a much lower mortgage rate, again more saving. In regards to mortgages, interest rate, amortization and down payment all greatly affect total payback amount (the amount that actually comes out of your pocket in the end).

Getting the ball started on savings is critical, but how one saves is also important. Young adults are extremely lucky to have the TFSA at their disposal. It is a plan geared to help individuals save faster, by not paying taxes on any and all accumulated gains (interest or capital), one can keep more money in their pocket. What makes this demographic so lucky is they have time on their side, a 22 year old graduate today has the potential benefit of 40 years worth of tax-free savings between now and age 62 (a very general assumption for an age of retirement), the plan does not break down either, the funds can be kept TFSA sheltered for even longer if desired. An individual in their 40’s does not have the benefit of this extensive time frame. The TFSA does not have to be retirement oriented, withdrawals are not limited (though re-contributions are over-contributions face penalty fees) so if the time comes to make a significant purchase, funds in your TFSA can be made available.

An individual contributing $400 monthly for five years into a no-interest savings account would accumulate $24,000. That same $400 contribution put into a TFSA, earning a modest 4.5% annual average, would achieve an amount of $27,100. The importance of interest, and more specifically, the importance of tax-free interest, is seen in the extra $3,100.

$400 is a great starting amount. Firstly, it sets up well in regards to TFSA contribution restrictions, the $4,800 annually that you contribute falls within the current $5,000 maximum. Further savings can be kept in non-registered accounts or deposited to an RRSP (for further tax advantage). TFSA contribution maximums have the potential to increase in the coming years, so an increase to the $400 may soon be of option as well. Secondly, it’s an amount that, added with a young adults current monthly rent amount, is lower than what ones monthly shelter cost would be on a mortgage. It is important to consider mortgage payment (principal, interest and insurances), utilities, property taxes, condo fees, etc. when calculating shelter costs. This could be considered experience gained towards the budgetary constraints that will someday come along with future mortgage costs.

Doing the things that you were forced away from during school is still important. Strike a balance between spoiling yourself and saving. It is best that the balance be savings heavy, spoiling yourself should never come at the expense of one’s credit or savings.

I know it’s difficult, I’m living it, I graduated one year ago this month. I wasted hours of study time daydreaming of my future lifestyle, fast cars, Vegas villas, and a lot of golf. I overlooked many of the costs that were to come.

Reality sure can hit a person, but I’ll choose being hit now while I can handle it, as opposed to ten years from now when it’s possible my wife and children also have to take the brunt.

Kyle Baranyk is a Financial Advisor at Servus Credit Union Ltd. in Calgary

Posted in Bank of canada rates, BC Mortgages, Best Rate Mortgages, British Columbia Mortgages, Canadian Economy, Canadian Housing Market - Lisa Alentejano, Canadian Mortgage News, Credit Scores, Debt, Fixed rates, Interior home mortgage, Kamloops home mortgages

Bank of Canada seen hiking rates in first half of 2011

TORONTO – The Bank of Canada is unanimously expected to keep interest rates on hold next week, but the uneven economic recovery has primary dealers and global forecasters divided on the timing of the next hike in 2011.

The Reuters poll, released on Thursday, showed 93% median probability that the Bank of Canada will keep its key rate at 1% at its next policy announcement date on Dec. 7, with all 44 forecasters polled predicting no move.

Among the 42 that forecast the central bank’s next hike, the majority saw it happening in the first half. The median forecast for the May 31 policy date has the rate rising to 1.25%.

But among the 12 Canadian primary dealers — the institutions that deal directly with the central bank to help it carry out monetary policy — the majority forecast rate hikes in the second half with a median prediction of a first hike in July.

When compared with a similar poll taken in October, the more recent survey showed rate hike forecasts had been moved deeper into 2011.

Thirty of the 44 forecasters surveyed say the central bank will still be at 1 percent after March 1, a more pessimistic view than the last poll.

“Given that the Bank of Canada had indicated that they didn’t want to see that great a divergence with U.S. rates and the Fed was actually doing quantitative easing, it made sense to push out the Canadian rate hike as well as opposed to adamantly defending a Q1 move,” said David Watt, senior fixed income and currency strategist at RBC Capital Markets.

“We’ve had a lot of recovery and we’re seeing some fade at the present time, so you get that caution that maybe the domestic side of the economy is not strong enough to offset the still sizable trade hit and currency strength.”

A report out on Tuesday showed Canada’s economy disappointed in the third quarter with the weakest growth rate in a year, while the economy shrank outright in September, adding pressure on policy makers to safeguard the patchy recovery.

Bank of Canada Governor Mark Carney in October gave a blunt assessment of the global and Canadian economic recoveries, saying the central bank would plot its next move with extreme caution.

Massive new monetary stimulus by the U.S. Federal Reserve to support a flagging U.S. economy also prolongs low rates south of the border, and Canada is seen not wanting to race too far ahead of its largest trading partner.

Mr. Watt noted that a concern for the central bank has been a Canadian dollar strengthening near parity without having seen a strong rebound in oil and natural gas prices.

“Sluggish Canadian growth and an elevated exchange rate will keep the Bank of Canada on hold until well into 2011 if, as we expect, core inflation readings return to their more muted earlier monthly trend,” said Avery Shenfeld, chief economist at CIBC World Markets.

“The U.S. Fed should still be on hold at a near-zero funds rate in early 2012, and wider interest-rate differentials would push the (Canadian dollar) to levels that would be too damaging to Canada’s export prospects.”

Estimates of the central bank’s target for the overnight rate by the end of 2011 range between 1% and 2.5%.

Next on the domestic data front, analysts will keep a close eye on the monthly jobs report on Friday and inflation figures later in the month.

Posted in BC Mortgages, Canadian Economy, Credit Scores, Debt, Home Loans, Mortgage by Lisa Alentejano, Mortgages - Get a second opinion, Vancouver Mortgages

Raise a money-smart kid

What a great article and one we can all take little tips from to use in our daily lives, enjoy the read;

Alex Matjanec was not the kind of kid who spent his entire allowance on candy – his parents would never have allowed it.

But Mr. Matjanec, the 27-year-old co-founder of mybanktracker.com, is not resentful. In fact, he credits his parents with helping him steer clear of the sorts of habits that can lead to debt and credit problems later in life. “They really did help me financially be smarter and more attuned with my finances and the value of the dollar,” he says.

At his parents’ urging, Mr. Matjanec got his first job, delivering newspapers, at age 9. He opened a savings account at 10 and had his first credit card by his late teens. He now works in personal finance (his website helps consumers make banking decisions and save money) and he urges parents to take similar steps with their own children to put them on the road to financial independence.

“Learning the basics of financial management will set the path for financial health and may keep them out of debt when they get older,” Mr. Matjanec says.

A few of his tips for raising money-savvy kids:

1. Encourage them to apply for a credit card. With set rules – and monitoring– a credit card can help them learn credit and debit management. If you’re worried they’ll rack up big bills, make sure the credit limit is low and consider holding onto the card and allowing your child to use it only in your presence.

2. Open a chequing account for them. Still not sure about that credit card? Transfer spending money into a chequing account for your child. It’s safer – there’s only so much money they can spend – and it will help them understand ATM and standard banking fees.

3. Put your kids to work. A part-time job is a great way to learn some independence and responsibility while still living at home. Starting a job at an early age helps teens appreciate the value of a dollar and promotes smart spending habits. (And why not have teens contribute to their college education?)

4. Set a minimum budget. So many young adults live paycheque to paycheque because no one ever taught them how to budget. Help your children figure out how much they need for the basics. Whatever’s left at the end of the month is theirs to blow.

5. Encourage cash. When you pay with plastic, your wallet never gets any lighter. By getting your kids to spend a real cash allowance, you help them to learn quickly how much things really cost and to limit their spending to what they earn.

6. Watch what they spend. It’s hard to find the balance between cool parent and responsible parent. However, by watching where your kids spend their money you can help them save. If they’re spending $100 a month on fast food, for example, and you show them what they could have purchased for the same amount, they may change their habits.

7. Have them create goals. Saving for the purpose of saving isn’t that exciting for kids. If you agree on a goal, such as a new iPad, and you offer to match what they save, they’ll learn not only the benefits of saving but also how to be smarter with their money. If they choose to blow the money before reaching their goal, they’ll also learn something: no iPad.

8. Set a good example. As they start making money, many teens are going to use their parents as a reference for what to do with that money. If you’re having financial troubles or aren’t managing your own budget, why not establish some rules for yourself as well? Remember, you will always be your child’s most important role model.

Posted in BCMortgage, Best Rate Mortgages, Canadian Mortgage News, Credit Scores, Interior Mortgages, Kamloops First Time Home Buyer Tips, Kamloops Mortgage Broker, Kamloops mortgage consultant, Mortgage Affordability, Refinancing

Whats Your Credit Score?

 
Do you know what your credit score is?

 A credit score is a mathematical formula that translates the data in a credit report into a three-digit number that lenders use to make credit decisions.   The numbers go from 300 to 900. The higher the number the better. For example, a number of 750 to 799 is shared by 27 per cent of the population. Statistics show that only two per cent of the borrowers in this category will default on a loan or go bankrupt in the next two years. So that means that anyone with this score is very likely to get that loan or mortgage they’ve applied for. 

 So whats in a credit report?

 A surprising amount of detail, actually. It contains information about every loan you’ve taken out in the last six years – whether you regularly pay on time, how much you owe, what your credit limit is on each account, and a list of authorized credit grantors who have accessed your file.  Each of the accounts includes a notation that includes a letter and a number. The letter “R” refers to a revolving debt, while the letter “I” stands for an instalment account. The numbers go from 0 (too new to rate) to 9 (bad debt or placed for collection or bankruptcy.) For a revolving account, an R1 rating is the notation to have. That signifies that you pay your bills within 30 days, or “as agreed.”
How can i get a copy of my credit score?
 
You can ask for a free copy of your credit report by mail. There are two main credit bureaus in Canada: Equifax Canada and TransUnion Canada. Complete details on how to order credit reports are available online. Basically, you have to send in photocopies of two pieces of identification, along with some basic background information. The reports will come back in two to three weeks. 
 
To get your all-important credit score, you’ll have to spend a bit more. Both Equifax and Trans Union offer consumers real-time online access to their credit score (your credit report is also included). Equifax charges $23.95, while TransUnion’s fee is $22.90.
 
Are there mistakes?
 
Have you been denied credit and don’t know why? Is someone trying to steal your identity? A simple check of your credit report will probably answer all those questions. And it’s free for the asking. For Equifax, it’s easier to phone 1-800-278-0278, or write the credit reporting agency and tell them you think there’s an error in your file. The credit reporting agency sends along the form you need when it sends you the credit report. Use it to spell out the details of any information you dispute. And there’s a form online, too. Also send along any documents that support your version of the matter in dispute. The reporting agency then contacts whoever submitted the information you’re disputing.
 
Its important that you revisit your credit bureau score at least once a year.  This will allow you to stay on top of what your credit score is as well to check that all other information is correct.
Stay tuned for my next article….”How to repair your credit”?