Many people have never seen one. Your credit report is a little known document that controls much of your fiscal destiny. A detailed picture of your last 7 years. The information in this report is critical to your ability to borrow money, and is a potent piece of paper. So what precisely is in this document and why is it so vital?

Basically, the answer is the credit report tells a lender about who you are, where you reside and how you manage money. If you’ve got a history of abusing creditors, chances are high that you will not find many who will want to be next.

Let me start by stating that if you’re worried about your personal privacy at this point, that ship left a while back. As soon as you have credit your life is a public record. Everything you’ve done regarding money, and a creditor of every sort is on this document.

The most important aspect of the credit report is your score

This sacred number is commonly called your “Beacon Score”. The Beacon score can range anywhere from 300 to 900. The average Canadian rests around the mid 700s. No-one has a 900 beacon. There’s also info on the reasons for your score. The score may be the first and last thing read by underwriters who will reject it outright based solely on the number. As an example if your beacon score is under 600, you cannot qualify for CMHC insurance, therefore requiring you to put 20% down.

The report gives detailed info, including the date the file was initially established, the last activity, your current and previous addresses, any AKA’s, maiden names, your date of birth, SIN number and employment.

The subsequent section lists the amount of investigations for your credit info.

A warning will appear if there have been 3 or more investigations in a 90 day period.

Too many inquiries may indicate prior refusals, creating more red flags. The next line reports the number of investigations on your credit in the past 36 months as well. Lenders hate to see large numbers here either.

You will see a list of inquiries for the previous 12 months, including the source of the investigation. This is important for a mortgage company who sees 2 other mortgage company investigations on the list and may throw up another, you guessed it, red flag.

An outline of the report is provided and is helpful to someone that looks at them all day. Sometimes, if you have lived abroad, there’ll be an indication that a foreign bureau has reported info. There is notice of how much credit you’ve been given and how well you paid your bills. There will also be an account of your “R” ratings, more on them later on.

Any bankruptcies or collections will be detailed next. Of importance is the date of discharge, sort of bankruptcy (private or business), if your spouse was involved, your liabilities, assets, and the trustee.

Secured loans, chattel mortgages, or registered liens where personal property is staked as collateral are listed in serious detail and include the loan amount and maturity date.

Judgements are court orders against a debtor for payment of monies owing and aren’t something a bank wants to see. An enormous red flag.

Trades are firms you owe money to. Trade lines are catalogues of multiple corporations. Here the details of the loan are listed. Terms, balances, past due amounts and if they are Open, Revolving, or Installment. Your method of payment is ranked from R0 -too new, authorised, not used, to R9- bad debt, placed for collection, skip,(no run,red flag, red flag)

After all is exposed and your financial soul laid bare, the final section of the credit history is the Consumer Statement Section. This contains statements that you have put on file to explain discrepancies or other comments.

It is highly recommended that you pull your own credit report at least once a year to protect against fraud and wrong info, causing damage to your rating.

Mortgage Lenders are to be Made to Reveal Pre-Payment Penalties

Almost exactly 2 years after promising to improve mortgage prepayment penalty disclosure by lenders and banks, the FCAC, (Financial Consumer Agency of Canada), has developed a new mortgage “code”. This code will make it mandatory for all mortgage lenders to provide additional info on the calculations that go into penalties. They will be required to provide an explanation for the difference between homeloan offerings, including techniques to repay mortgages faster.

Consumer groups have been after these changes for quite a long time and have long charged banks and lenders with;

- Obstructing penalty disclosure with legalese and obscurity.
- Failing to offer an understandable formula for calculating pre-payment charges.
- Neglecting to provide easy access to the inputs which make up the formulas, i.e. First rate at orgination, comparative rates, etc, that need to be entered in to make the formula work.

The FCAC has registered a rise in customer complaints about pre-payment penalties, especially IRD charges, and a scarcity of disclosure to clients. They have stated that lenders/banks,” hinder the consumers’ ability to decide mortgage payment options.”

Among the new rules banks must provide;

1) The method of calculation of penalties.

2) If a specific case is complex, supply a simplified method.

3) Provide access and a description of all inputs, (first rate at origin, future value , outstanding balance, relevant rate of interest, bond yields.)

4) Explain how to obtain the information.

5) A worksheet template on their websites.

Though not required till November 2012, there is a particular list of necessities under the code each bank must follow;

- They must describe clearly a borrowers pre-payment rights.
- They must illustrate the dollar cost of this option.
- Explain the factors that may cause the penalties to change.
- Provide particular info required by the borrower for figuring out his/her own penalties.
- List of additional fees.
- Contact info of a knowledgeable person in the area of pre-payment calculations.
- Provide a written statement of all pre-payment penalties with full description of both the formula used and the time frame of the statement.
- They must divulge what triggers a pre-payment penalty, the best way to avoid receiving any penalties and how to pay off a mortgage faster without penalties.

Perhaps the most welcome requirement of loan corporations is the provision to post a mortgage pre-payment calculator on their public website to help buyers identify a reasonable estimate of penalties.

It isn’t often an official agency makes a guarantee and keeps it as well as the FCAC has done here. We applaud their effort and anticipate the execution of these changes.

If you decide you want to start looking at buying a house, then there are many factors you need to consider. It can be a stressful process, especially if you need to sell your current home to make it happen.

You must also insure that your finances are in order and you can actually afford to buy the house you desire. The easiest way to accomplish this is to make use of a mortgage calculator. A mortgages calculator will determine what your home buying budget should be based on several parameters you enter into the tool.

To use this tool properly, you must first decided what you are willing to spend on housing per month. With that amount in mind, you can enter numbers like cost of house, interest rate, and length of mortgage into the widget. It will then calculate the monthly payments for you.

On top of all that, it will also show you all the posted mortgage rates from all the big banks. It is something you can factor into your calculations, but also keep track of on a daily basis while looking for a new house.

Since banks are always out to outdo each other when it comes to mortgage rates, it is a good idea to use this calculator frequently. Staying on top of the latest trends and rates can be a great way to save money on your mortgage and can also help with other sectors of you may invest in.

Another important thing to remember is to save early and often for your down payment. More than ever, banks require home buyers to pay at least 5% of the cost of the house before receiving a mortgage.

The last thing you need to remember is to not rush in to buying a house. There are few decisions as important as choosing a property that is right for you. It is a decision you have to live with, and in, for a long time. Making the wrong decision can prove costly.

To the over 65% of Canadian mortgage holders who do not search for the best and most suitable mortgage come renewal time, this article isn’t for you. To the rest of you, please continue reading. There are things to think about before your mortgage renews. Of course rates are a consideration but you haven’t got any real control over that. Your credit score and history pretty much identifies the risk level you are. There are other more personal points to consider. Here is the top 10

1)Have You Explored All of Your Options?

There are opportunities in the market place that may better meet your needs.

2)Are You Comfortable With Your Payments?

This could be the time to make the payments easier to manage. Or from a different perspective if you can, start paying down your principal and save on interest.

3)Do you need Cash Flow for Other Stuff?

Things happen in life that we can’t always prepare for. Stuff like providing for your kids’ education, a job change, or a significant purchase must be considered in your refinancing.

4)Are You Able to Handle Changing Rates?

Some homeowners can go with the flow when talking about rate fluctuations. Others like to know precisely what their payments will be.

5)Will You Be Selling in the Near Future?

A shorter term mortgage with flexible terms will slash penalties for early payout of the loan.

6)Are You Considering a Major Project?

These things can make your house more valuable. You might want a line of credit to provide financing for project.

7)When Would You Like to Be Mortgage Free?

Amortization is the amount of time to entirely pay off your house. It’s everyone’s dream and it’s attainable.

8)Can You Utilise Your Home Equity to Meet Other Goals?

Investments or another property and the interest from them is tax-deductible.

9)Have Your Insurance Needs Changed?

Your situation could have shifted over 5 years. Time to check your coverage to determine if it still meets your obligations.

10)Are You Getting the Best Rates?

Did you notice this one was last? It’s still on the list however, and rates are important. Banks are extremely competitive and desire your business. It is your money after all , so you ought to be picky when it comes to paying out interest.

Anyone who is interested in using an internet mortgages calculator will find a number of options to select from. Prior to technological advancements, people wanting to obtain loan information and estimates had no way to do so. People do not need to depend solely on the services of the lender to give them estimates for mortgage repayments. There are some things that you should know, however, about internet calculators.

One of the first things to be clear about is that these calculators provide a repayment estimate only. The most popular of these tools on the internet is the repayment calculator. Even though you will only get an approximation of what the repayment value will be, the software helps people have a better understanding of how the lending process works. Before the use of these online calculating tools, the information and numbers were not accessible to consumers.

The online calculators offer helpful information regarding the interest rate and length of the loan and the impact on repayment. The calculators are very user friendly. It is only necessary to input the starting amount of the loan, interest rate, and the loan terms. After all the required information in input the software program will calculate the repayment amounts.

Remember that these calculators only generate an approximation of home loan repayment amounts. In addition, understand that the calculation you get depends on the specific requirements and circumstances of the particular broker. Once the estimates have been received, make sure to contact each broker to validate the results that you were given from the internet.

To help them attract new customers, home loan brokers use the internet repayment calculator. There are so many brokers that are competing for business that they offer these simple to operate online tools to improve customer services and increase their consumer base. These tools provide people with access to the numbers and details that they never had before making the loan process very convenient.

Before these calculators became available, folks depended on their lending agent to provide them with calculations for home loans. Many people found the process of finding a home loan some what difficult to understand. With the development of the mortgage calculator, the mystery of home loans has pretty much ended. People now have a better understanding of how the entire loan process works.

Individuals have the ability to search a number of mortgage lender sites so they can compare the repayments by using the calculators provided online. The best part is that they can do the searching from their home. After finding a number of loans that will work for them, folks can leisurely read through the conditions or terms each lender has.

With the number of home loan brokers it is important to utilize a mortgages calculator online. Since there are several to choose from, take advantage of the opportunity to do some comparison shopping. The repayment calculators are a convenient way to help folks understand the home loan process.

Buying a home can be a difficult and stressful process. Luckily, there is a lot of help available to those feeling overwhelmed by the purchase of a new home.

I recently decided to purchase my first home. I have wanted to own my own property for quite some time, but I did not know the extent of what I needed to do to make it happen.

I had lived in rental properties all my life up till that point, so I had no expertise in choosing a home. I had an inkling of what kind of dwelling I’d want and also the region I needed to reside in, but there were still numerous issues I needed to educate myself on.

I knew next to nothing with regards to the details involved with analyzing a home. I had been also fairly nave when it came to the whole home finance loan application practice. Thankfully, I had a lot of support when the time came to apply.

The very first recommendation which was supplied to me was to work with a mortgage calculator to find out what I could find the money for. This can be a tool that you simply input the price of the home, amortization length, interest and payment timetable.

Being aware of what amount you are going to be paying out each month helped in choosing which home was a fit for my finances. With this information, I selected a handful of homes to have a look at.

After looking at a few homes, I discovered the property I would soon purchase. It is a one story home with three bedrooms and 2 bathrooms. It is certainly inside a nice residential area, but also provides some fantastic seclusion.

Soon after the deal had gone through, I hired a dwelling assessor to inspect the building and advise me of any complications. He also offered recommendations for possible improvements.

When everything was complete, the change from rental to residence was considerably easier than expected. Budget wise, it’s better to own your property and nothing beats the feeling of accomplishment ownership provides.

Of all things that helped me through the process, I would recommend a mortgages calculator to anyone considering buying a home. It is free, simple to use, and immensely helpful.

You have decided to purchase a new home or refinance your current mortgage, have made contact with your mortgage broker for the mortgage and he asks you about your credit history. The term “Beacon Score” comes up and instantly you picture a light house sending warning light beams to ships in the night. You are not that far off. A “Beacon Score” is exactly that. It’s a warning to banks of the hazards of lending you money. It tells banks, how much to charge you for your home loan, in direct relation to that risk you pose to them in getting that cash back.

No one knows 100% the way in which the scores are arrived at, except the inventors, Bill Fair and Earl Isaac. Back in 1956 with Bill Fair’s engineering and Earl Isaacs mathematician skills, they started their company, the “Fair Isaac Corporation” (FICO). The principle of the company was that information used smartly can be used to improve business choices. In 1957 Conrad Hilton hired FICO to design and build the billing system for one of the first credit cards, Carte Blanche. It was not until 1989 the first purpose “FICO scores” appeared as the “Beacon Score”, at Equifax, and the “Emprica Score”, at Trans Union.

The most typical, Beacon scores, range in number from 300 to 900. The average Canadian has scores close to 700. Many people think that you must have a score in the 800s to get the finest rates. In actual fact, if your score is between 680 and 700 you’re likely going to get terribly competitive rates, partly due to the extremely competitive nature of the market today.

You can still qualify for a decent arrangement with scores of 600 or more if you have solid income and no delinquencies. However you are going to need to have a minimum score of 600 for an insured mortgage or CMHC, (down payments of less than 20%). If your score is under 600 you slip in to the “B” client standing. Do not feel bad though, 1 in 5 Canadians are in this group, but it is possible to improve your scores.

Credit report stipulations differ dependent on the type of mortgage you require. Self-employed individuals (BFS “business for self) will require higher scores and more paperwork to qualify. Investment properties or rental properties also require more solid scores and a higher deposit, than the average purchase or refinance.

Though it is not empirical information, the following is an estimation of how your scores relate to the mortgage rates you can expect;

Scores

Interest Rate

700+

Best Market Rate

680-699

0-.2% above

650-679

+.30

620-649

+.40%

600-619

+.50%

580-599

+ 1.5%

540-579

+2.0%

500-539

+3.0%

There are differing factors that can have an effect on your score and are weighted in different ways. These are;

Payment history “35% - Recency and number of late payments over 30 days. One overdue payment can affect your score by 15-20 points.

Current Debt -30% - How much do you owe and to how many creditors.

Age of Debts “15% - The older your accounts the better. You ought to have at least 3 accounts over 1 year.

Categories of Debt - 10% - Bank loans, credit cards, automobile financing, all influence your score differently

Number of Investigations “10%- Many inquiries in 12 months will have a negative effect on your score.

Credit History Killers

There are definite credit history killers which ought to be evaded at any price. The largest ones are bankruptcies, judgements and collections. If you’re now dealing with these worries, it’s far better to get them all cleared up before you even think about applying for a mortgage.

Bankruptcies do not mean you will not ever qualify. If you have officially discharged the bankruptcy, 3 months before and have a minimum 20% down-payment, you could have a chance. You will need a provable down-payment of 5 -10% down if your bankruptcy has been discharged 2 years back. The longer the time between discharge and trying for credit the better it is. Be cautious. Application of credit information in time will nearly erase the low points of bankruptcy.

How to enhance your Scores.

Avoid late payments “years of great credit can fly out through the window if you are late on paying your debts. Keep your debts current.

Pay off all debts owing as quickly as possible - anything on public record. Loans, cars, lines of credit and so forth.

Keep credit card balances low . Or even better pay off balances every month. Over 70% of your borrowing arrangement on your cards? This will have a negative effect on your score. Get your balance to less than 30%. This tip alone has the most important effect on you scores.

Reduce your credit cards to one . The oldest account in good standing. Close every other accounts and confirm their closure. If you don’t have a credit card apply for a secured card, not a pre paid card. Pre-paid credit cards do nothing for credit ratings.

Avoid retail cards . They tempt debt spending and come with huge interest charges.

It is in your own interest to know your credit history info before you consider trying for credit or a mortgage. This is to permit you to clear up any errs on you report. Over 70% of Canadians have inaccuracies on their credit reports. It’s not difficult to do and should be monitored at least twice a year. The Equifax internet site is very easy to work with and will produce immediate results. For some more information visit their website at www.equifax.ca .

Fiduciary duty is larger than a phrase it is a set of continual legal rules that all lawyers, stock or investment consultants, real estate consultants and mortgage brokers and agents, among many occupations, are bound by. They can and do face court action with tough penalties for violation of these rules and principles. The Supreme Court of Canada defines the main elements of fiduciary duty as, trust, confidence and a reliance on abilities and knowledge. If those elements exist in a functioning relationship, then fiduciary duty exists and is legally enforceable. Put simply , fiduciary responsibility is; the putting of a client’s interest before yours and providing the very best standard of care to that client in the promotion of those interests.

In the case of a commercial or retail outlet, for example a store, car dealer, furniture store, or a bank, workers are thought to be “at arm’s length” from the transaction. This includes the “mobile mortgage experts” being heavily promoted by the banks.

When you go to one such outlet it is implied that the store clerk, sales representative, or worker is representing their employer. In this situation, the employee is tasked with first ensuring the employer’s best interests, (profits), are being met. It is accepted that in any transaction the salesperson has an interest in raising their own compensation with commissions from a sale. The same thing happens in a bank. Allotments, bonuses, raises and promotions are all based on the sales of products, heavily advertised promoted and dictated by head office for the bank’s profit.

On the Wikepedia web site, out of the 22 examples listed as jobs, which routinely by law, attract fiduciary relationships, banks aren’t on the list, with the single exception of mutual savings banks. (a mutual savings bank is where the entire profits belong to the depositors and isn’t owned by stockholders)

Legally, according to the Supreme Court, a commercial or retail corporation is not bound by fiduciary duty. In a decision in the case of Hodgkins v Simms, 1994 (3SCR 377), it stated “in a professional counsel context however a person receiving advice should not need to protect him/herself from the abuse of power by his or her independent adviser, when the very basis of the advisory contract is that the advisor will use their special ability on behalf of the advisee. In sharp contrast to arm’s length commercial relations which are characterized by self interest, the essence of a professional advisory relationship is precisely trust, confidence and independence.”

Further inquiry into agent and fiduciary responsibility exposes such a relationship imposes certain duties and responsibilities. Some are, but aren’t limited to;

Faithfulness to clients.

The proper use of skills and knowledge to promote the client’s’s best interest.

Putting the client’s interest put before the agent or agency.

Not ever compromising a client’s best interests.

Provision of full disclosure and consent.

Complete confidentiality and reliability.

For the many thousands of unknowing people who go into a bank expecting that a fiduciary relationship will exist and is enforceable by law, this must come as a shock. They believe wrongly their trust, confidence, and dependence on skills and awareness of the bank employee will be in their best interest. They expect their interests are being promoted, but bizarrely the banks are exempt legally from fiduciary duty. In spite of all of the evidence and appearances that exist in a bank to give the impression of these responsibilities existing, there is not legal significance or a duty for the bank to provide them. Try obtaining full disclosure next time you make an application for a mortgage at a bank, it won’t happen.

For the many thousands of mortgage agents, agents and independent professionals who are bound by both agency law and fiduciary duty this only serves to strengthen our dedication to serve our clients faithfully. It is a vindication of our unique and purposeful place within the mortgage industry. It also serves to market the mortgage agent network as the best logical choice when looking for a mortgage. When we promise that, we are working for our clients and not the lender, you know that as our client, there’s very powerful and definite Supreme Court precedence to make sure we do.

There are many hurdles to overcome when you decide you want to upgrade your living arrangements. Before even getting to that point, you must feel ready to undertake such a stressful process.

You must also insure that your finances are in order and you can actually afford to buy the house you desire. The easiest way to accomplish this is to make use of a mortgage calculator. A mortgages calculator will determine what your home buying budget should be based on several parameters you enter into the tool.

Before using this web app, it is important that you have a clear idea of what you want your monthly mortgage payment to be. Once this is established, type in all the variables required, like mortgage rate, amortization period, and down payment. Hit enter, and it tells you what you should expect to pay.

A bonus feature of this mortgage calculator is a comparison table of all the major banks’ interest rates. Additionally, after you have inputted your own numbers, you can cycle through the differences in cost when using all the different rates.

Mortgages are a very competitive market among financial institutions. Therefore, make sure to check each bank’s rates daily as sharp decrease in interest rates can happen overnight without much warning. By being vigilant, I can guarantee you will be better off financially.

Another important thing to remember is to save early and often for your down payment. More than ever, banks require home buyers to pay at least 5% of the cost of the house before receiving a mortgage.

The last thing you need to remember is to not rush in to buying a house. There are few decisions as important as choosing a property that is right for you. It is a decision you have to live with, and in, for a long time. Making the wrong decision can prove costly.

Obtaining a house is sometimes a complicated and overwhelming process. The good thing is, you will find a ton of help readily available to people left confused by the process of finding a new dwelling.

I recently decided to purchase my first home. I have wanted to own my own property for quite some time, but I did not know the extent of what I needed to do to make it happen.

I had resided in flats until recently. I did not have much wisdom in choosing a property. I had a rough concept of what type of dwelling I’d want as well as the region I wished to live in, but there were nevertheless many issues I was about to discover.

I knew next to nothing with regards to the details involved with analyzing a home. I had been also fairly nave when it came to the whole home finance loan application practice. Thankfully, I had a lot of support when the time came to apply.

The initial bit of wisdom that was given to me was to utilize a mortgage calculator to ascertain what I would be ready to budget for. It is a software that you just input the cost of your home, amortization interval, mortgage rate and payment frequency.

Being aware of what amount you are going to be paying out each month helped in choosing which home was a fit for my finances. With this information, I selected a handful of homes to have a look at.

After checking out a few houses, I found the one I would eventually buy. It is a 3 bedroom, 2 bathroom bungalow that is in a nice residential area, but also offers some good privacy.

Following the acceptance of my offer, I called a residence evaluator to walk through the property and advise me of any issues. He also created a list of suggestions for future renovations.

All in all, the transition from apartment to house was much smoother than anticipated. It makes more sense financially and nothing beats the feeling of owning your residence.

I wholeheartedly vouch for the use of a mortgages calculator if you are in the market for a new home. This easy and free tool can provide crucial information quickly, so don’t hesitate to make use of it.