Teach Your Children Well

Credit History is a major factor in considering credit worthiness. Lenders are going to move more in the direction of risk based pricing, which means that borrowers with better credit scores, get better mortgage rates. Teach your Children how to use credit because it will determine their opportunities for owning a home.

TIPS TO IMPROVE YOUR CREDIT RATING

1. Always pay your bills on time. (The payment of utility bills such as phone, cable and electricity are not recorded in your credit report, however many cell phone companies report late payments.)

2. Pay Debts as quickly as possible.

3. Try to pay your full balance off on all cards every month whenever possible.

4. Don’t go over the credit limit on your credit cards. Stay below 75% of the limit

5. Don’t make too many credit applications (use a Mortgage broker). Your score doesn’t change if you personally make credit inquiries.

6. Contact creditors if you’re having trouble making payments and work out solutions.

7. Read the statements you receive from your credit card company carefully. Keep yourself up-to-date with any changes or fee increases.

8. Keep your credit usage to no more than two credit cards and one Line Of Credit. Avoid store credit cards.

9. Get a copy of your credit report from all three credit-reporting agencies at least once a year and make sure they’re in order.

The ‘New’ Market

Real Estate markets all over Canada are bracing for the results of the new rule changes. When the first announcements came out, many lenders ran for cover sighting the end of the world as we know it. As the rules have started to roll out, we saw some modifications to allow a smoother transition. Earlier this summer when the provincial government announced the 15% tax on purchasers by non citizens or landed immigrants, they did not put much thought into the roll out and it was painful for a few weeks.

Closer to home the markets continue to move and prices are holding pretty steady. We see some price reductions but most properties are still selling at recent market values. The single family home is the part of the market that did see some slow down. In Vancouver there is an abundance of tear down homes on the market, waiting for developers to catch up. The permit process takes a long time and has caused a back log for this sector.

Condos and Townhouses continue to sell and the values are maintaining. There was a lag in strata property values until this last 12 months where they have caught up and will perhaps decrease the gap between single family and strata properties in the next 12 months.

Interest rates are holding steady at historical lows. Both long term rates and short term are low. The new rules have potential to drive rates up slightly but we have not yet seen this play out. Bond investors are betting on low rates for a long time, and the Bank of Canada is setting the stage for prolonged period of inactivity, sighting a soft economy.