5 Best Tips to Fix your Credit

Ok so you've had a few minor scrapes with some credit departments. Your not their favourite client. Now what? Throw in the towel and it's all down hill from here on out? Heck no! It's never to late to start rebuilding and fix your credit. The reason why people don't improve their credit is purely... lack of know how. Well here's some tips anyone can use to fix there credit starting today!

1. It's ALL IN YOUR NUMBER - Reviewing your credit report annually is one of the best credit practises everyone can employ. Many people don't know that they can get their credit report FREE.  This is via snail mail (Canada Post) so it does take a bit longer but if you don't have a credit card this will work for you. If you do have a credit card you can request your report and pick the FICO score option which will actually tell you what your score is. 
2. STOP THE OVER-APPLYING TRAIN RIGHT NOW - It is a little known fact that enquiries that happen when you apply for credit will reduce your credit score. People that have lower credit scores often just don't want to give up and will apply at many different places hoping that a different lender will help them. This does NOT help the situation. The more you apply - the lender sees these as "I NEED MONEY. I KEEP ASKING FOR MONEY. THEREFORE I DO NOT MANAGE MONEY WELL". This moves you up on the risk scale with them and your BEACON goes LOWER. If you are re-establishing credit it is important to be informed about the types of lenders that will APPROVE you. One enquiry is usually enough for something like a secured credit card referenced in the next TIP.
3. LOCK DOWN A SECURE CREDIT CARD - There are credit card companies tailored to consumers with credit skeletons in their closet. They are select and do charge a higher rate and sometimes annual fee for their services. This is due to the risk they see with someone having poor past payment history. In order to get your credit fixed you need GOOD payment history which a secured credit card can do... establish new history of habits. 
   
   Here's how a secured card works:You apply for a $500 limit - The lender requests cash security usually 120% of the limit which they hold and pay interest (usually the equivalent of a daily interest savings account so we're not talking 2% - lower). They hold that as security so that if the consumer does not meet their obligations that are 100% guaranteed their full money back plus interest.  THIS IS YOUR GET OUT OF JAIL FREE CARD! Use it wisely! Do not use more than 50% of the limit and set it up for an automatic payment of the minimum so there is no possibility of forgetting. Pick one small expense a month and use it strictly for that. Many people are so "gun shy" with credit cards they use it for groceries and go home just to pay it off in full online.  This is your chance to change old habits.  All payments MUST BE on time. NEVER EVER go Over limit. That's as bad as a late payment. 
4. REVIEW YOUR SCORE/Apply for VEHICLE LOAN/SECURED LOAN - After about 6 mos to a year (depending on the scale of your skeletons) you should be able to apply for a loan for a vehicle. This is by far, the easiest, fastest way to improve your score and possibility for lenders approving you for things like a mortgage sooner! Some people will disagree with this due to the rates of interest car lenders charge (15-29%) but I believe if you have money saved (with no credit payments this shouldn't be an issue for most) you should have a healthy down payment for a vehicle and be able to look at a small loan for $15,000 - $20,000 assuming you meet other affordability/job guidelines. By borrowing for a vehicle are increasing your HIGH CREDIT showing on your credit report and lenders will be more apt to extend a mortgage and other important credit sources once you have shown timely repayment on a loan of this size. The key is moderation.
5. STAY THE COURSE  - It's been well over 21 days so your habits must be changing. By now you are receiving those pesky notices in the mail "Approved", introductory offer, "Call now"... blah, blah, blah. SHRED THEM and don't look back. Keep your number of accounts to a minimum. You have earned the privilege of this fine looking score now all you need to do is keep paying on time, keep your limits well below 70% and keep a watchful eye on that report annually!

 About the author:
Tiffany Clark is a mortgage broker in Grande Prairie, Alberta and the owner of Elements Mortgage Inc.  

Stated Income - What is it?

A lot of news surrounding speculation about upcoming changes in Canadian Mortgage Rules has been surfacing in the last couple of weeks. Throughout the news there have been lenders changing and pulling programs and the governments touting of "Lenders using Sub-Prime type" guidelines.

I wanted to discuss one of the most recent changes and major developments that many people may not know about - Stated Income Programs. What the heck is that? Well here in the Peace Country, this may affect a lot of consumers. These programs cater to Self-Employed individuals and how they qualify for the purchase or refinance of a home. It is a common issue when Self-Employed individuals try to purchase a home that they encounter difficulties. With programs like these the lenders offset risks of Self-employed individuals by asking for more down payment and the insurer (CMHC, Genworth or Canada Guaranty) charges a higher insurance premium. They also ask the borrower to have a higher credit rating. To ensure they are making good decisions they also confirm that the client has been in business for a minimum of 2 years and has no personal taxes owing to Revenue Canada.

So here's the skinny for "Stated Income" Programs - Also called Business for Self or Alta A.

 - Borrowers need to have 10% down payment for purchase
 - 680 beacon (650 if they are putting 15% down or more)
 - confirmation that they have been in business 2 years+
     *Usually confirmed by Certificate of Incorporation, Business License or Business Accounts
 - Premium charged is higher.

Firstline and Street Capital have already pulled this program as well as a few of their other "riskier" programs. They will likely not be the last lenders to do this.  It is a strong possibility that the government will change rules so that programs like these will be removed entirely from the lender landscape.

Bottom line is... If this is you, you have 2 options. Talk to your Mortgage Associate now and see if you fall within the guidelines of lender programs that are still available OR do some tax planning to qualify under traditional guidelines.

I have included links to the insurer programs for more detailed information as well.
CMHC Self-Employed
Genworth - Business for Self Alt A Program
Canada Guarnty Low Doc Advantage


Additionally here is a great article by some economists and speculation about coming changes to Mortgage lending rules in Canada and other articles detailing lenders pulling Business for self and immigrant programs.

http://www.canadianrealestatemagazine.ca/news/item/1019-property-investor-definitely-keep-your-day-jobs

http://www.mortgagebrokernews.ca/news/breaking-news/economists-bet-on-more-mortgage-rule-changes/123481/

http://www.moneyville.ca/article/1124551--mortgage-lending-tightens-for-self-employed-immigrants

Enjoy the video... Share it with your friends, and please feel free to comment, ask questions or tell me what else you would like to know more about.

Oopsies to Avoid before Closing on your Home

I often tell people that next to getting married that this is one of the most stressful events of their life. Purchasing your first home is a lot of work, can be overwhelming and there is just so much to know. The good news is that my job and that of the team at Elements Mortgage, is make this as easy and stress free as possible.

Throughout my interactions with clients I have had quite a few times when we had "oopsies" or things that clients did that unknowingly put their home purchase in jeopardy. This is not their intention but really is just due to the fact that they only have done this one... or once every say 7 or ten years. This is something I do every day, so as an expert it's my job to educate you on what NOT to do so you don't have to stress.  Sooo here's a list of things that you might want to keep in mind when you are purchasing a home or pre-approved and shopping for a home.

I thought it would be fun to add some humour and do a few videos. The first video is me with 5 tips and the 2nd is Jadia Wilson another wonderful Mortgage Associate at Elements Mortgage.  Enjoy...  Please feel free as always to add comments, ask questions and forward to your friends.

Thanks for putting your Trust in Tiff!
Elements Mortgage we do things.. a little different!

Elements 2011 in Review

Well it's been a crazy year! One filled with lots of firsts, challenges and continued learning! The team at Elements Mortgage is expecting nothing less for 2012 and we are looking forward to continued growth of our team and the business!

Here is a brief overview of the highlights of 2011 for Elements Mortgage

• Elements Mortgage Inc. Established June 2011 by Tiffany Clark
• Upon the Licensing of Elements as an Independant Mortgage Brokerage in affliation with Axiom Mortgage Partners Tiffany joined forces with MBSA Investments, Major Investments, and Canada Loyal. This strategic alliance allows the Elements Mortgage Team to refer clients to other specialists in Insurance, Investments and Private Equity in conjunction with the Elements Capital company. Our team is pictured above in the Christmas picture, Rob Major, Clint Brading, Logan Shaw and myself. Offering a well rounded resource for your financial needs helps us to help you ACHIEVE FINANCIAL FREEDOM!
• Tax Deductible Mortgage Plan Exclusivity for Peace Region - Introduction and implementation of the first TDMP Mortgages at Elements Mortgage. Tiffany made an agreement with TDMP Mortgages to become the exclusive agent for marketing and distribution of TDMP in the Peace Region. This unique strategy offers clients the ability to use equity in their homes to grow investments, accelerate repayment of their mortgage and get higher tax refunds by making their mortgage tax deductible!
• Sheldon Ward joined elements in July finished his Mortgage Associate Course and started working with clients while training with Tiffany! Sheldon has become a great asset to the team and clients are thrilled with the time and attention he takes when considered their needs!
• Jadia Wilson joined the team in October with over 10 yrs experience in the lending and real estate industry! Jadia has been a welcome addition digging in and meeting with new clients as well as her bringing her existing clients in the process!d
• Belinda DuToit was hired as our Office Co-Ordinator! Every office needs a woman like Belinda who keeps us organized, ensures everyone within the Elements Capital group is on the same page and is now assisting with keeping our books in balance as well too! That is a tall order and at the same time she is Mom to two beautiful little boys and loving wife to Daniel!

It's a great feeling to be part of a company and a team where it feels as if you are part of a family! Being part of a team that cares about the quality of work they do, taking each day as an opportunity to raise the bar to the next level has been tremendous! I have no doubt that we will continue to improve the offerings to our clients and expand the clients we serve over the next year!

Wishing you and yours prosperity in the coming year! Looking back is part of moving forward... Lots of goals for 2012... Here's to you achieving yours as well!

Tiffany

Introduction to Elements Mortgage Blog

Well for anyone that has seen my previous "Trust in Tiff" Blog's then you know the format and I committ that 2012 will be no different - just amped up with better content! This blog is about providing you - the viewers with information on purchasing and financing your home with the best tools available. I also include tips on Home Maintenance, Preparation for home sale, Renovations, Tax Credits relating to homes and credit rebuild information.

Happy Reading!
If you ever have questions please feel free to comment and I will answer as quickly as possible!