When applying for any sort of loan, one of the most important factors a lender is going to look at is your credit score.

But what really is a credit score, who keeps track of it, and most importantly, how can you improve yours?

There are a few simple ways to keep your credit score in good shape.

First off, prioritize paying your bills on time. Missing payments on your credit cards, lines of credit and so on, can have a very negative impact on your score.

You can spend an entire lifetime building up for good credit. All it takes is one mistake to negatively impact you.
Second, try to keep your credit cards at no more than 65% of their limit. This is the sweet spot that credit scorers are looking for.

Thirdly, you should avoid the “free credit score” services out there because they’re just looking to sell you credit, or sell your information to someone who does.

When you’re looking for credit, what they’re going to ask you is, ‘Why are you looking for credit?’ And you’re going to say, ‘Well, I’m looking to get a mortgage, or I’m looking to get a car loan.’ And then they’re going to sell your information to banks and mortgage brokers and people out there who are able to supply you with credit.

Instead, what you should do is go directly to the credit scoring companies. They’re required by law to give you your credit information directly, without affecting your score. TransUnion offers an online form. Equifax has multiple types of credit reports you can order.

You also want to try to limit the number of credit inquiries by different lenders. When you’re shopping around at different banks, the number of inquiries can add up as each bank makes an inquiry to see what they can offer you.

But as a mortgage broker, we have access to multiple lenders all at once.

You could effectively come to see a mortgage broker, get one inquiry done, and that inquiry is good for 20 financial institutions, As opposed to having to go directly to every bank. If you have any questions, contact your local Dominion Lending Centres mortgage professional near you.

While a home purchase agreement may seem simple and straight forward, there are many differences that you can encounter that can be a big surprise to first-time homebuyers. While you expect the date of possession and the full purchase price to be outlined in the agreement, other items should be included that you may not be aware of.

New builds vs existing homes

If you are buying a newly constructed home, there are quite a few differences compared to what you get in an existing home.
Legal fees – often home builders will include the legal fees in the purchase price. You should be aware that the law firm that will provide the service is the builder’s lawyer. Should a legal dispute develop, they will take the side of the builder and you will have to find your own independent legal counsel. In fact, if you can afford it, you should consider getting your own lawyer. The $1,200 savings could end up costing you more in the long run.
You should be aware that the show home that you have visited usually has numerous upgrades. I know that when I purchased my first new home I assumed that the bathroom rough-ins in the basement were standard, only to find out later that this was an upgrade. Retrofitting plumbing pipes is a costly venture.
You should also be aware that landscaping, fences and window coverings are usually not included in the purchase price. Double check to see if the triple-pane windows on the show home are standard or an upgrade. Hardwood floors and basement development are usually an upgrade as well.

Existing homes

When you are buying an existing home, you will find that the window coverings, fences and landscaping are included in most cases. The window coverings should be included in the offer to purchase contract.
Something that may look like it’s supposed to be there but the seller may want to take with them is the hot tub and storage shed. Don’t assume that these items are included. The legal fees are never covered in an existing home sale.

Finally, from a mortgage standpoint, you should be aware that if you are purchasing an acreage or a large property with several outbuildings, your mortgage lender will cover the cost of the home plus one outbuilding and up to five acres of land. If there’s a garage, barn and workshop usually the garage will be included in what the mortgage company will cover but not the smaller outbuildings. Check with your Dominion Lending Centres mortgage professional before you make an offer on a property like this.

You’ve decided that you want to buy a home. You call up a realtor to show you a listing and the first question they ask is “How much are you pre-approved for?” Many realtors will refuse to book home viewings until they can confirm that you are pre-approved. Why?

1- It shows that you are seriously committed to a home purchase. I have been told stories by realtors of people booking a series of homes to see and then being dropped off at McDonald’s to be picked up by another realtor to see some more homes. A smart realtor is going to ensure that their time isn’t being wasted.

2.- People have an idea of how much home they can afford just based on their own personal budget. Sometimes this amount is way off. The stress test along with loans, alimony or child support payments or high condo fees can make the amount of house you can afford a lot less than you would expect.

3- Surprises on your credit report. Many times home buyers haven’t checked their credit report before house hunting. An unpaid bill or a dispute with a contractor may result in a lien or collection showing on your credit. There may even be something from a person with a similar name. It’s important to make sure your credit is clean and that it is yours and not someone else’s.

4 –Income issues. A lot of people run out to get a new home when they receive a promotion at work. If the promotion includes a pay hike, is it salary or are they relying on overtime? Mortgage rules demand a two-year history for commission income, overtime or self-employed income. This can also curtail how much you qualify for.

5A – Credibility of the realtor.  When a realtor makes an offer on a home for you, they are not only investing their time and the listing agent’s time but their reputation. Making offers that will not result in a firm sale hurts their reputation in the industry. Trustworthiness and reputation are very important to realtors as they are guiding you in the largest purchase you make in your lifetime.

5B- Negotiating Strength.  In a situation where there are competing offers on a property, the seller’s agent will encourage the seller to take the offer that is backed by a pre-approval over another offer that does not have a pre-approval to support it. Your chances of getting your dream home are greatly increased with it.

My one recommendation is that you take the time to contact your favourite Dominion Lending Centres mortgage broker and get pre-approved. It will save everyone time as well as disappointment.

It’s important to understand the home buying process, so here’s a 7-step checklist.

Step 1: Down Payment
The hardest part of buying a home is saving the down payment (a gift from the Bank of Mom & Dad also works).
• For purchases under $500,000 minimum down payment is 5%.
• Buying between $501-999,000 you need 5% on first $500,000-PLUS 10% down payment for anything over $500,000.
• Buying a home over $1 million you need 20% down payment.

For any home purchases with less than 20% down payment, you are also required to purchase Mortgage Default Insurance.

Step 2: Strategize, Define Your Budget and get Pre-Qualified
Unless you can afford to buy a home, cash in hand, you are going to need a mortgage.
You need to get pre-qualified, which should not be confused with the term pre-approved.
The big difference is that no approval is ever given by a lender until they have an opportunity to examine the property that you wish to purchase. The bank may love you… but they also must love the property you want to buy.
Pre-qualifying will focus on gathering documentation to prove the information on your mortgage application including credit, debt load, income/employment, down payment etc.

Mortgage brokers will make sure you get a great mortgage rate. Just as important as rates are the terms of your mortgage which should include:
• prepayment options (10-20%)
• penalties
• portability
We also discuss what type of mortgage fits your current situation
• fixed vs variable?
• life of the mortgage (amortization) 25 or 30 years etc.
• payments – monthly, semi-monthly, accelerated bi-weekly

Step 3: Set Your Budget
Keep in mind that just because you’re pre-qualified for a certain amount of mortgage, doesn’t mean you can actually afford that amount. Prepare your own monthly budget to be sure.
Typically, your total home payments (including mortgage, property taxes, strata fees & heat) should not exceed 32-39% of your gross (pre-tax) income.

Step 4: Find the Right Property – Time to Engage a Realtor
Once you have been prequalified for a mortgage, based on your budget… you need to find a realtor.
Selecting the right real estate agent is a very important step in the home buying process. When you work with an agent, you can expect them to help you with many things, including:
· Finding a home
· Scheduling tours of homes
· Researching the market, neighbourhood and home itself
· Making and negotiating your offer to purchase, and counter-offers
· Providing expert advice on home buying
· Handling the offer, gathering documentation and closing paperwork
I recommend interviewing at least three realtors. You will quickly decide who has your best interests in mind. Do you want to deal directly with a realtor who’s going to work with directly when you go home hunting, or do you want to deal with a BIG name realtor, who has buyers & sellers realtors working under them? There are advantages to each – you need to decide what is the best fit for your situation.
Get referrals for realtors from friends and family… OR ask me, I have a group of realtors that I know and trust.

Step 5: Mortgage Approval
Once you have found the property you would like to call home, your mortgage broker will send your mortgage application and property information to the lender who is the best fit for your situation, based on your input.
If the lender likes your financial situation and the property, they will issue a “commitment” letter outlining the terms of the mortgage. The lender will send you a list of documents, so they can verify and validate all the information you told them on the mortgage application.

Step 6: Time for the Solicitor (Lawyer or Notary)
Once the lender has reviewed and approved all your mortgage documentation and the property documentation, your file will be sent to your solicitor (in B.C. you can use a lawyer or notary). They will process all the necessary title changes and set up a time for you to meet, review mortgage documents and sign.

Step 7: Get the Keys
On the closing day, the documentation for your home purchase will be filed at the land titles office by your solicitor. Typically, the possession date is 1 or 2 days later, giving time for the money (down payment & mortgage) to get to the home seller. On possession day you set up a time to meet with your realtor to get the keys.
Congratulations you’re done – you now own your home!!

Mortgages are complicated, but they don’t have to be… speak to a Dominion Lending Centres mortgage broker!

Over the past several years, investigators have been working on an ongoing investigation relating to criminal money laundering in Canada. Looking at B.C. alone, billions of dollars have been laundered through B.C. casinos by criminal organizations and parked in high-end B.C. real estate over the past decade or more.

With government citing limited resources and a lack of funds available to conduct a proper investigation, criminals have been able to manipulate and take advantage of the Canadian and B.C. legal system for years and it is now finally coming to light the impact it has had on our economy, most notably our real estate market.

One of the measures the government implemented several years ago to help crack down on this was sourcing the funds that people were using for the down payment on their home purchases. Lenders are required by the federal and provincial government to collect a minimum of 30 days of transaction history for every bank account where the money comes from to help complete a purchase on real estate. Most lenders are still requiring 90 days and they are also required, by the government, to source any large deposits above $1,000 that are unrelated to employment income.

If you have e-transfers and transfers between your own accounts within the 90 day period, the lender will require a 90-day history of the account in which funds were deposited. That means, if you have a savings account reserved just for a down payment, but you put $1,000 a month in there from your chequing account, brought in $5,000 from a TFSA, and put in $3,000 in cash all before you wrote an offer on a home, a lender is going to want to see 90-day history of your savings, your chequing, and your TFSA account as well as an explanation on where the $3,000 cash came from.

Most people find this frustrating and rightfully so – you are handing over personal information over a long period of time. However, due to the extreme affect money laundering has had on our economy, these rules are likely not going anywhere. When preparing your down payment, be prepared that the lender will be required to collect a 90-day history of every account you have where money is coming from to help cover your down payment. This is not because the lender feels like it. This is because each loan is reviewed by government regulators and these regulators need to see that the lender verified the money for the down payment was legitimate.

Also, with your T4’s and Notice of Assessments usually going into lenders, if you are just starting a new job and were making $20,000 a year while in school and now have $150,000 in savings for your down payment a year out of school, the lender is allowed to ask for a full year history because your income does not justify the savings you have.

Be prepared! Lenders are required to source down payment funds and with more and more news coming out every month on money laundering, the rules may only get more rigid. If you have any questions, contact a Dominion Lending Centres mortgage professional near you.

Well, it finally happened. I was meeting with a financial advisor today and they looked at my business card and asked: “Why does it say Dominion Lending Centres and not Dominion Mortgage Company?”

I have been waiting for 7 years to hear this question. I had an answer all ready for today. I said “that’s because we are not just a mortgage company, we’re a lending company. This provided me with a segue into a conversation about how we do equipment leasing, factoring and cash advances.

I meet plenty of small business owners who are trying to build their business and also buy a home. In one case, the business owner had opened a machine shop. He bought $100,000 or more of equipment. As he did not have a long established business, lenders insisted that he put the loans in his own name. As a result, he had lots of business loans outstanding and was still showing little income. As he had incorporated, we were able to free up his credit by having DLC Leasing purchase the equipment and he leased it back. This provided a good tax break his accountant liked and it freed up his personal credit, which I liked.

Long story short, Dominion Lending Centres is a small/ medium business owners best friend.
We can help you get into a house where other companies see obstacles. If you are in a situation like this, contact your local Dominion Lending Centres mortgage professional and get some help.

A couple we had worked with in 2011 recently came into our office. They had some life changes that had occurred in the past 7 years and were unsure if they could make things work. They came back to speak with us and shared a little bit of their story and thoughts on working with a broker. Check out their story below! **Names Changed for privacy purposes**

Jane and her husband Kevin never in a million years would have thought that they could own a detached home in the Fraser Valley. One look at the market and they felt “stuck” where they were in their two-bedroom townhome in Kamloops, British Columbia. They had purchased their townhome in 2011 by working with us at Dominion Lending Centres.

They loved their little home but a job opportunity for Kevin opened up and the need for more space (with baby #2 on the way) was pulling them towards the Fraser Valley. Now they had their doubts about being able to afford a house in the Lower Mainland. They had strong credit and very little debt, but there is always the “unknown” when you are looking at buying a home. They decided to reach out to us again—and we were all in to make their dream become a reality!

After a few weeks of shopping around they found a picture-perfect home in the Valley for $675,000—and were able to move in just last month (just in time for the holidays!)

When asked why they opted to work with a broker, they said it was due to the ability of Mortgage Brokers being a “One stop shop”—no shopping around from bank to bank or having to have your information pulled and sent off to several different lenders. It was all done for them. They were able to send all of their information and let us do the rest. And the best part for Jane and Kevin? We got them a great rate back in 2011 and were able to do the same in 2018!

Why else should you choose to work with a broker instead of the bank? Just a few reasons for you…
1. A broker can access rates that your bank can’t. They can access:
i. Tier 1 banks in Canada
ii. Credit Unions
iii. Monoline Lenders
iv. Alternative Lenders
v. Private Lenders

This extensive network allows brokers to ensure that you are not only getting the sharpest rate, but the mortgage product is also aligned with the client’s needs.

2. A broker will negotiate on your behalf, directly with a lender. There is no “grunt work” needed on your part—your mortgage broker does it all for you.
3. A Mortgage Broker can produce and show you several different options so that you can select the optimal product for your specific needs. A broker won’t just look at the rate, they will also look at:
i. Prepayment options
ii. Costs of Borrowing
iii. Portability
iv. Blending and Extending
v. Penalty to break
4. A broker can save you some serious cash! Because they have access to a multitude of different lenders and can offer discounts the bank can’t people end up saving money when they work with a mortgage broker.
5. Working with a broker means you have someone on your side—always. Mortgage Brokers will work to provide you with industry information and updates long after your mortgage is completed. They want to make sure that the product that was right for you when you signed is still the right one for you today and in the future.

Mortgage Brokers are a dedicated group of individuals who work directly for the client, not the lenders or the bank. Brokers are problem-solvers, advisors and honourable individuals. We work hard to give our clients the best that we can in an industry that constantly is evolving and changing.

Kevin and Jane made the right choice working with us here at DLC.

It is a common misconception that you will qualify for a mortgage in the future because you have qualified for a mortgage in the past.

This is not accurate!

Do. Not. Assume. Anything.

Even if your financial situation has remained the same or has improved, securing mortgage financing is more difficult now than it has been in recent years.
The latest changes to mortgage qualification by the federal government has left Canadians qualifying for 20-25% less. On top of that, guidelines that lenders would use in determining your suitability have been replaced with non-negotiable rules and declarations.

As mortgage professionals, we keep up to date with the latest trends in the mortgage world by understanding lender products and staying attentive to evolving changes.

From experience, we can tell you that having a plan is crucial to a successful mortgage application. Making assumptions about your qualification or just “winging it” is a recipe for disaster. Here are a few points on why a mortgage broker is a must for the first-time homebuyer.

1. They have access to over 40 different lenders, not just one
2. They work for you, not for the lender
3. They will guide you through the application process
4. They save you valuable time by shopping for you
5. They pull your credit once — if you go to multiple banks, you will have multiple credit pulls

If you are thinking about buying a property, please feel free to contact a Dominion Lending Centres mortgage professional where we can help you devise a solid plan!

The easy way is the more expensive way…

If you have a mortgage, you’ll be completing a mortgage renewal when your current term has finished.
While most Canadians spend a lot of time and expend tons of effort shopping for an initial mortgage, the same is generally not the case when looking at mortgage renewals.

So what is a mortgage renewal?

Mortgages terms are locked in rates that are *over a set term* which can vary from 1-10 years.

About 3 months before the end of your term, your current lender will suddenly become your best friend showering you with attention and trying to entice you with early renewal offers…And the first offer is never their best. It really shows how they value the relationship.
“Please, please sign here on the dotted line to renew… it’s sooo easy!!”

You have 3 options

1. Sign and send back with no alterations or changes (don’t do it, really I mean it… don’t do it!!)
2. Check the market to make sure you are getting the best rate and renegotiate with your current lender
3. Talk to a mortgage expert and together we can discuss the best options available for your situation

Lenders know that 80% of people will sign their renewal forms because it’s fast, easy and convenient. Banks & lenders push this “take it as it is” tactic to borrowers to ensure they make the highest profits to keep their shareholders happy. As an educated consumer, you need to take the time to ensure you are being offered the best possible rate & terms you can get.
Remember all those hours of research you did regarding lenders and mortgage rates when you were buying your first home… don’t forget!
It is true that signing the renewal document is easy, however, it is in your best interest to take a more proactive approach. Money in the lenders pocket comes directly out of your pocket.

5 steps to save you money on your mortgage renewal

1. Receive the renewal offer from your current mortgage lender and examine immediately. This gives you enough time to make an informed decision
2. Do your online research about the best current rates for you
3. Call your current lender and negotiate!
4. If your lender will not offer you a better rate then it is time to move your mortgage. You will have to complete a mortgage application and gather applicable documentation just like you did for your original mortgage, but we will help with most of the work!
5. Take a look at your budget and see if you can increase the amount of your regular mortgage payment. This will eventually save you money by paying off your mortgage faster

Your mortgage is one of your biggest expenses. For this reason, it is so important to find the best interest rates and mortgage terms you possibly can.
As you can tell there is a lot to discuss about mortgage renewals. We can help. Contact a Dominion Lending Centres mortgage professional today!

Recently I was finishing up a mortgage with a young couple who just had a beautiful baby girl. I brought up the topic of mortgage and life insurance as well as getting a will written up. The response from the husband was that it was such a morbid topic and a real downer. They just wanted to be excited about their new home.

The fact is that people, even young people die from car accidents, cancer, and even accidental drownings while on vacation. It’s a topic everyone avoids but it needs to be addressed, particularly when you are taking a major financial step like buying a home. What would happen to your spouse if you died suddenly with your mortgage not paid off?

I spoke to a major Canadian mortgage company about this topic.
I asked if the surviving spouse would be kicked out of the house. “ When someone dies who was on our mortgage we want to know right away. We ask for a copy of the death certificate so that we can take them off the title. We will let the mortgage run its term if payments are being made on time. Many surviving spouses receive a life insurance policy and can pay off the mortgage or at least keep up the payments. We will renew the mortgage if payments are up to date. However, should the surviving spouse want to refinance the mortgage they would have to re-qualify for it.”

So what can you do to make life easier for your family should you die with a mortgage on your home? The easiest option is to have sufficient life insurance to ensure that they can keep up payments or to pay off the mortgage. Dominion Lending Centres mortgage professionals all offer MPP (Mortgage Protection Plan), a life insurance policy that pays off the mortgage in full in case of the death of the policyholder. The payments never go up because the mortgage balance is going down as the insured person gets older.

Another option is term insurance or whole life insurance. Speak to your favourite insurance broker about this.
Finally, if the surviving spouse is 55 or older, and they can’t afford to maintain the mortgage, a reverse mortgage may be the solution. No payments are made on the principal unless you decide you want to. When the widow(er) moves out the sale of the home pays off the mortgage and interest.

While it can be a “downer” to talk about death and disability, a responsible home purchaser needs to have the conversation with their Dominion Lending Centres mortgage professional at the time of their purchase, refinance or renewal. The sudden death of a family member causes enough grief for the survivors. Why add to their misery? As the old commercial used to say “Why wait for spring, do it now”.