Check Your Credit Report

Check Your Credit Report

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Did you know that you can check your credit report for free?

That’s right, once a year you can ask the credit reporting agencies Equifax and Transunion for free to mail you, or you can pick it up in person, your personal credit report. If you need it faster, you can always create an account online with them and quickly pull your credit report and save it electronically for future reference. Otherwise, if you have the time, you can wait for your personal credit report to arrive in the mail.

check your credit, equifax, transunion, score

Check your credit report once a year

It is recommended to check your credit report once a year. This regular interval is helpful to prevent fraud, because when you check your credit report you can see exactly all your credit activities and if someone fraudulently uses your credit information it will be noticed and can be rectified immediately.  Alternatively, if left unchecked and only noticed some time later when you apply for a credit card, or a car loan, or for a mortgage, and then at that point it is noticed, the problem can set you back with your applications as you first will need to resolve the issue(s).

It is educational and informative to check your credit report

When you check your credit report not only do you see a credit score, but you see everything about your credit activity and history in the last seven years. You learn what is being reported to the credit bureaus, what your balances, are and also you might see credit items that you thought were closed or canceled or paid off still no closed or not canceled or not paid off. This gives you time to go after the discrepancies and rectify the problem, because it could be negatively affecting your credit strength and score.

Government of Canada has information on how to check your credit score

We are thankful to the Government in being proactive in providing helpful information and tools that assist the consumer in learning about how to manage their debts and improving their credit strengths.

To learn more about how to check your credit score or find out about the different tools on their web site, check out the following links:

Financial Consumer Agency of Canada

“How to Order your Own Credit Report”

“Understanding your Credit Report and Credit Score”

 

Trusterra Mortgage is also hear to help. Should you have any questions about credit score and how it affects your mortgage approval rating do not hesitate to Contact Us. We would be happy to assist you.

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Fraud Prevention Month 2015

Fraud Prevention Month 2015

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Its Fraud Prevention Month 2015

fraud prevention month 2015
picture courtesy of Competition Bureau, Government of Canada

It’s fraud prevention month 2015 in March and Trusterra Mortgage will endeavor to provide relevant and informative content regarding how to avoid fraud.

To start fraud prevention month 2015 we would like to share tips from the Government of Canada Competition Bureau.

Tips to Protect Yourself from Fraud

  • Don’t be fooled by the promise of a valuable prize in return for a low-cost purchase.
  • Be extra cautious about calls, emails or mailings offering international bonds or lottery tickets, a portion of a foreign dignitary’s bank account, free vacations, credit repair or schemes with unlimited income potential.
  • Don’t be afraid to hang up the phone, delete the email or close your Internet connection.
  • Don’t purchase a product or service without carefully checking out the product, service and company.
  • Don’t be afraid to request further documentation from the caller so you can verify the validity of the company.
  • Don’t disclose personal information about your finances, bank accounts, credit cards, social insurance and driver’s license numbers to any business that can’t prove it is legitimate.
  • Shred unwanted personal information such as bank statements, credit card bills, unwanted receipts, cheques, pre-approved credit applications and old tax returns.
  • Check your credit report every year and report problems immediately.
  • If a scam artist contacts you, or if you’ve been defrauded: Report it! Your reports are vital to the anti-fraud efforts of law enforcement agencies.

 

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Managing Your Debt

Managing Your Debt

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Managing your debt

managing your debt

Income Status

Whether you are unemployed, employed, or self-employed, managing your debt is a very important matter that should not be put aside for a rainy day. Understandably, it can be very stressful and time consuming to worry about managing your debt, but it is one of those items on your ‘to-do-list’ that should be at the top of your list.

Temptations

It’s sometimes hard to avoid all those sales people in the malls’ and supermarkets promoting credit cards and other credit sources with all the ‘perks’ and ‘gifts’ that come with them when you apply for the credit card. Even at the university and college campuses across the country students are at times bombarded with advertisements of credit cards and loans. It is at these times that you need to be disciplined and focused on the more important and immediate things in life. Chances are that if you need extra credit cards and loans to purchase items, then you probably are not making enough money or are already to your credit limits. Psychologically we feel that the debt can be paid back on a monthly basis in the long term and we don’t worry about it. However, it is much harder to do this than it seems.

It’s Hard

Managing your debt therefore becomes strenuous, difficult, overwhelming, and depressing, affecting other areas of your life and let’s not forget the effects debt has on your personal relationships with those who you love the most.

Trusterra Mortgage sees the effects of debt in the mortgage industry as well. Many home owners who have maxed out on all their credit cards begin to have challenges in keeping up with their mortgage payments. If not addressed quickly, they see themselves with the risk of losing their home, one of, if not their largest personal investment.

Never Give Up

Don’t give up and don’t feel dismayed when thinking about managing your debt, because there are many different sources and resources out there ready to assist; they include Government agencies and private sector not for profit groups.

If you are having trouble with making your mortgage payments please Contact Us and we will do our best to see what options are available for you in resolving your debt issues. As well, if you are currently living with family, or renting a place, and are in debt, you too have options to managing your debt.

There is Light at the End of the Tunnel

If you are having difficulty and challenges in managing your debt, the following links will be of interest to you. Not sure about how to deal with your debts? It doesn’t hurt to send us a private message and its free consultation that we offer you.

Good luck and don’t forget to check out the below links.

Financial Consumer Agency of Canada – Empowering Canadian financial consumers and promoting responsible financial market conduct.

Industry Canada Office of Consumer Affairs – The Office of Consumer Affairs (OCA) promotes the interests and protection of Canadian consumers.

Canadian Association of Credit Counselling Services – Helps to establish a Canadian culture of responsible financial behavior and aims to enhance the personal financial well-being of all Canadians by strengthening their financial health.

Credit Counselling Society – The Credit Counselling Society is a Canadian registered, non profit service for consumers.

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Low Interest Rates Good Reason to Lower Debt

Low Interest Rates Good Reason to Lower Debt

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Low Interest Rates Good Reason to Lower Debt

In a press release on February 6, 2015 Lucie Tedesco Commissioner Financial Consumer Agency of Canada stated that just because interest rates have gone down, referring to the recent Bank of Canada decision to lower the overnight rate, does not mean that Canadians “should take on more debt.” In fact the low interest rates good reason to lower debt.

 

Low Interest Rates Good Reason to Lower Debt
picture courtesy of the Financial Post

To many mortgagers (owing money borrowed on real estate) or those with loans whose payments are calculated based on the Prime rate, which in turn is calculated on the Bank of Canada’s overnight rate, low interest rates can be a double edged sword. Especially if you can’t control your spending; however if you are able to curve your appetite for borrowing, then for you low interest rates good reason to lower debt as you can pay more towards your principal and less towards interest payments.

Commissioner Tedesco went on to say that “Canadians should look at this low interest-rate environment as an opportunity to pay debt down, rather than to accumulate more, even for a larger house, a newer car or a winter vacation.” We should be realistic and be ready for when interest rates will increase.

For its part the Financial Consumer Agency of Canada has developed tools and resources to assist the consumer with managing their debt obligations and can be found at “How to Beat that Debt.”

To read the full press release from Lucie Tedesco Commissioner Financial Consumer Agency of Canada click here.

Trusterra Mortgage is here to help. If you currently have a mortgage and are considering to consolidate your debt, or want to get the lower interest rates that are available currently, contact us to see what options are available for you and we’ll assess your current financial situation to see whether it is worth it for you to break your mortgage to refinance it or not.

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Beginners Guide to Getting a Mortgage

Beginners Guide to Getting a Mortgage

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A beginner’s guide to getting a mortgage

In this beginner’s guide to getting a mortgage we will take you through the main steps of applying for a mortgage application. This beginners guide to getting a mortgage will cover the main points that will help you better understand what is involved when getting a mortgage in Canada.

Beginners Guide to Getting a Mortgage

A beginner’s guide to getting a mortgage STEP 1 – find a mortgage professional

We strongly recommend you working with a Mortgage Broker or Agent. They are licensed with their respective Provincial Governments and have met all the required educational standards to become a licensed mortgage broker or agent.

There are many advantages to acquiring the services of a mortgage broker or agent. To name a few;

  1. They work for their client’s best interest,
  2. Mortgages are what they do day-in, day-out,
  3. Because a mortgage broker or agent is not working for any of the lenders there is no conflict of interest for them towards pushing you to one lender or the other,
  4. They constantly stay up to date with the real estate financing world by participating in continuing educational courses and workshops.

A beginner’s guide to getting a mortgage STEP 2 – ‘checks and balances’

Buying real estate is, for most people, the largest single investment they will ever make, and because of this, getting a mortgage should not be taken lightly. Every person thinking about buying their own home whether now or in the future should start planning for the inevitable. What is the inevitable you ask? It is being able to show the lender that you are able to pay them back on a timely manner as agreed upon based on your credit strength and income. And how do you show this in practicality? Lenders such as Chartered Banks, Trust Companies, and Credit Unions follow Government underwriting guidelines, and as well their own internal policy’s, all designed to test how strong or week someone’s personal financial strength is in comparison to their debt level’s to be able to pay back the mortgage loan. To do this the lenders have certain requirements and they ask for information from the borrower when considering whether to approve them for a mortgage loan or not. They want to make sure at minimum the borrower has:

  • Enough income to pay back the monthly principle and interest of the loan
  • At least 5% down payment or more; you can even use gifted money from immediate family
  • A satisfactory credit history and a healthy credit score
  • We also recommend checking your credit report and score regularly, perhaps every year or two at Equifax and Transunion. This is great preparation for when you are ready to apply for a mortgage by making sure there are no discrepancies or fraud activity in your accounts.

Beginners Guide to Getting a Mortgage

That means from now you can start putting aside money each month in your bank account for your down payment and making sure that you have a steady job or income coming in to show the lender that you can afford to pay back the loan. As well, you want to make sure that you are paying back your debt on time, and on a monthly basis, and not be late making those payments.

A beginner’s guide to getting a mortgage STEP 3 – Consult with your Mortgage Broker or Mortgage Agent

Beginners Guide to Getting a Mortgage

Now that you have done your checks and balances, you can contact your Mortgage Broker or Mortgage Agent and consult with her or him about your current financial strength and debt obligations. They will ask you to fill out their mortgage application so that they can better assess your financial health and credit worthiness/readiness to apply for a mortgage. Your mortgage professional will, after reviewing your financial and debt history, ask further questions and give you advice on what steps to take next; whether to continue with your mortgage application or to wait until other matters are taken care of to strengthen and improve your chances of getting approved for a mortgage.

 

This post and its content, we hope, has provided you with the basic information you need when considering applying for a mortgage. Don’t hesitate to Contact Us with your questions, and if you would like to start the mortgage application process. As well, we invite you to share any thoughts you may have about the mortgage application and approval process below in the comments section.

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How Many Credit Cards

How Many Credit Cards

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How Many Credit Cards is too many credit cards?

How many credit cards do you have? Are you the type of person who is good in controlling him or herself when it comes to spending with credit cards, or do you fill out every credit card application at every retailer for the sake of getting the gift that comes with it?

There is such a thing as having too many credit cards. Everyone should ask themselves how many credit cards they really need. In reality, you really need one or two credit cards; perhaps one Visa card and one MasterCard or American Express card. Most retailers, online shops, and other merchants accept Visa and MasterCard, so if you have one of each card you’re pretty well covered everywhere you go to buy things.

How many credit cards you need? We suggest no more than two. Here are some disadvantages of having too many credit cards:

  • The likelihood of losing a card can increase by having too many credit cards.
  • If you are not good with controlling your spending, you can easily max out on your credit cards.
  • Maxing out on credit cards is not healthy for your credit rating as your credit score will start to drop.
  • When time comes to apply for a loan, having too many credit cards can raise a red flag for the person or institution who is considering lending you money.
  • Having too many credit cards can create challenges in managing them and paying their balances on time each month, which in turn will negatively affect your credit rating.
  • Every time you apply for a credit card your credit report will take a hit; meaning, the credit card company has to check your credit report to make sure everything is good before they accept your credit card application. That hit to your credit report can affect your rating.

how many credit cards

 

Some people in their efforts of trying to help you out will consider how many credit cards you need based on whether you are newly starting to establish credit or not. That’s fine, but we still think having just two credit cards is enough to help with establishing credit history. Down the road you may, if your income can support it and your track record of paying back loans on time, consider getting a third credit card.

how many credit cards

 

In the context of building and strengthening your credit report and history with the credit bureaus, here is a ‘link‘ to Industry Canada talking about improving your credit score.

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Why Your Credit Score is Important

Why Your Credit Score is Important

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Why Your Credit Score is Important why your credit score is important

As part of our coverage of November Financial Literacy Month #FLM2014, in this blog we will share with you information about the importance of why your credit score is important.

In Canada, and the United States having a strong credit score or what we call in the industry a beacon score, with a rich history of on time debt repayment is very important and goes a long way when it comes to applying for a mortgage or any other type of a loan.

We will focus our discussion in this blog on the Canadian mortgage market and why your credit score is important.

If you have good credit it will be that much easier to get approved for a mortgage. Throughout your lifetime of spending and purchasing items using your credit card or a line of credit or both, and as well other credit items such as car loans, these transactions are all recorded by the two credit bureaus here in Canada, namely Equifax and Transunion. These credit bureaus use mathematical algorithms to create your credit score based on your spending, credit limits, credit balances, and whether you pay back on time every month your debt obligations or not. They even take to account how many days or months you are late with making your payments and use this information when building and updating your beacon score.

Equifax_Transunion

The reason why your credit score is important for getting approved for a loan, such as a mortgage, is because the creditor or the mortgagee relies on the credit report to decide your credit worthiness and repayment ability if they were to give you a loan or a mortgage respectively.

The starting point for your beacon score, once your name and first credit activity is recorded in the bureau’s database normally is 650. From this point onwards, it is hoped that the borrower pays back their loan or debt on a monthly basis, and as they do, their beacon score begins to climb; eventually rising above 700.

The opposite is true if the borrower cannot or does not make payments on time and is late, their credit score will start to drop below 650 making it difficult for them to get approved for a loan or a mortgage from traditional creditors / lenders. Many times borrowers with poor credit scores have no choice but to wait on their plans to buy a home and get a mortgage until their repayment history improves and their beacon score begins to rise again. Or they have to apply for a mortgage on unfavorable terms from a secondary or private lender who will charge a premium to approve the loan, but will overlook and be forgiving for the poor credit history and beacon score. The premium includes a much higher interest rate, lender fee, and shorter mortgage terms, normally one or two years. This is another reason why your credit score is important.

We always recommend that you pull your own credit reports from Equifax and Transunion every year or two to see what information about you is stored in their records. There are several advantages to doing this. Firstly by doing your own credit check to your name, there is no negative ‘hit’ to your beacon score unlike when you apply for a loan or a mortgage and the lender does a credit check on you. Secondly, you can see if your personal information is correct and up to date. Thirdly, you will get a detailed historical overview of your credit spending, which will show, for example, the payment you made on time to the particular credit card company or your car lease or whatever else, was actually reported by them and recorded in the credit report. An example of a potential issue is with old student loans or credit card accounts that you had asked to be closed. The student loan that you paid back in full is not shown to be paid off and still active in your credit report, and the credit card that you paid back and thought was closed is still showing as open with a balance in the credit report. These errors need to be corrected right away because they will have a negative impact on your beacon score. By doing a credit check you can find out about these abnormalities and rectify the matter.

This is why your credit score is important, because in Canada, for that matter in North America, much of the lending is based on the borrower’s credit strength and healthy history of making payments on time and being able to manage your debts responsibly.

If you are in a position right now with a low beacon score and bad credit history, and no major bank or lender will give you a credit card, we can help. Contact us and we will help you get a credit card so that you can start to rebuild your credit history and beacon score.

Another group of borrowers are those who are new to Canada and don’t have any credit history here and want to buy real estate right away. If you fall under this category, we can also help you get a mortgage without having a credit history or beacon score. Review our information about the New to Canada mortgage product and contact us for further details and to get your mortgage application process started.

why your credit score is important

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Financial Literacy

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Financial Literacy

November is Financial Literacy month (FLM) in Canada, but why not make part of every month for financial literacy in your family?  As Canadians get married and start their building their family unit they should start to think about their financial future.

We need to heighten the importance of financial literacy awareness and education in our school systems at an early age. It is never too young for children to learn about mathematics and focus on basic financial literacy principals and theory’s.

Parents can start teaching their children by example as well in their day to day interactions.  The Financial Consumer Agency of Canada defines financial literacy as “having the knowledge, skills and confidence to make responsible financial decisions.” financial literacy interracial family

Learning to manage your personal finances more efficiently and effectively will help you in the long run when it comes time to buy your first home. A consumer’s financial savviness will reflect in their high credit rating and strength and as well in how much savings and investments they have built up throughout the years up to the point that they are ready to provide down payment for their mortgage, and still have extra savings left over to cover other expenses in life.

To start your educational process in financial literacy we recommend you visit the web site for the Financial Consumer Agency of Canada http://www.fcac-acfc.gc.ca where you will find a tremendous amount of resources regarding the subject of financial literacy.

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Pay Down Your Debts

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Pay Down Your Debts

The New Year has started and what better way than to set practical and achievable goals to pay down your debts for this year. Many people build up a lot of debt throughout the year, and to top it all up, by the end of the year during the last month of it, more debt is accumulated due to holiday spending.

It is very important pay down your debts as the more personal debt you accumulate it will put a great amount of stress on your credit score. Your credit score will start to come down through time if you don’t pay down your debts on a regular basis, making timely monthly payments each month without being late. Pay down your debts

It can be a daunting task, especially if your debts are high, but there is light at the end of the tunnel. The first step is to make a personal commitment to yourself that no matter what, you will stick with your plans to pay down your debts.

Next, seek professional help and do lots of research about what resources are available for the consumer on this subject matter. One place that you can start with is the Financial Consumer Agency of Canada.  This Government agency has lots of helpful and useful information and tools about personal finances.

Sit down and evaluate all your debts. Break them down one by one so that you know exactly how much money you owe, and to whom or what financial institutions you have to pay them back to. If you’re running tight with money and don’t have too much to spare, at the least try to set a monthly budget aside to pay down your debts  with the minimal payments that each creditor allows you to make. Ideally you would want to pay back the entire debt; however, sometimes this is not possible to do at the start.

Some consumers might also own their home and have some amount of equity built up on it. Another option for your plans to pay down your debts could be to refinance your home, or use an existing Home Equity Line of Credit HELOC to pay back your high interest loans and then on a monthly basis pay down your HELOC or refinanced mortgage.  Most personal loans have a lot higher interest rate than the average residential mortgage interest rate. Using the equity built up of your home in the form of a HELOC or a new mortgage can save you  from high interest payments.

You can also Contact Us if you have any questions or need assistance with paying down your debts. We will do our best to help or at least to point you to the right direction.

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How to Get Approved for a Mortgage

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How to Get Approved for a Mortgage

Knowing how to get approved for a mortgage is very helpful when planning to buy your first home, or investment property or even your second home. Do not even think that real estate financing can be approved without knowing that there are certain prerequisites on how to get approved for a mortgage.

people that are mortgage happy, how to get approved for a mortgage

When it comes to getting a mortgage approval you should be ready to provide proof of employment / income, down payment, strong credit history and willingness to work with your mortgage broker or agent.  There will be occasions when it’s just not time yet to buy your own place and that’s alright. This wake-up call allows you to prepare yourself for the near future. Things that you can do on how to get approved for a mortgage are:

1) Make sure you have a steady income stream; full time employment or self-employment

2) Start putting aside money for your down payment. You will need at least 5% of the purchase price. The higher your down payment amount the higher could be your chances to getting a mortgage approval.

Equifax_Transunion, How to get Approved for a Mortgage

3) Do a credit check on yourself with both Transunion, and Equifax Canada

to make sure your credit is in order. If you find any problems with it, such as fraud, outdated payment / debt balance information, incorrect personal information, or anything else; immediately rectify the issues. The stronger and cleaner your credit bureau history the better it will look when the lender reviews it at the time of mortgage application.

4) Even the property you are interested to buy can make a difference in your mortgage approval rating. There are times that for different reasons the lender will not approve the mortgage application, even though everything else is good, because the property is not marketable, or too small, or was previously used for illegal purposes. This is where it pays off to work with an experienced and trustable Realtor who can find you the right properties.

5) Lastly,and equally important, consult in advance with a mortgage professional about your future plans of home ownership. A mortgage professional is trained and educated on the subject of mortgage lending and underwriting. They will be able to provide you with valuable and timely advice.

Are you wondering if you could be approved for a mortgage and how much? Contact us. We are here to help, and work with you in reaching your home ownership goals.

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