Since we have recently added a new baby Averbach to our family, babies are on my mind!

Yesterday, I read an article from the Globe and Mail,  Getting financially prepared for a maternity leave, which focused on how important it is to plan ahead.

The gist of the article is that even if you are eligible for maternity leave benefits your finances will take a hit. Are you planning for that hit?

One of the women interviewed said,

It will probably take two years to get back to our previous levels of savings,” she says. “I don’t stress about it much because overall our finances are okay and this is just something short term. I loved having the time to spend with my babies when they are little and I’m okay with the financial sacrifice.

Babies are expensive … Are you going to be able to make your mortgage payments, without over stressing your budget? Should you refinance? Are you planning on buying a new home or on renewing?   How will being on maternity leave affect getting new mortgage financing?

The sooner you plan for the new addition to your family the better!  Give us a call if you have any questions about how being on maternity leave may affect your mortgage financing.

On the CBC news site there is an article about how someone’s credit score was downgraded by 100 points because of an unpaid bill.  The gentleman in the article,  had moved and failed to inform one of his creditors (Telus).  Since the bills were going to the wrong address, it remained unpaid for years until it dramatically affected his Beacon score.

“When you have a lower beacon score it affects the amount a creditor will lend to you,” said Bonnie. “When there’s damage on a credit report it’s on there for six years.”

I highly recommend reading the article because it outlines Telus’s rationale for not tracking him down.  The article also gives some great tips about what you should do in similar circumstances and what you can do “after the fact” if your Credit Score is damaged.

This article really hit some “nerves” … check out the comments!

Mortgages are normally rejected because of credit problems, such as being delinquent on your bills, employment problems, a heavy debt load, or not enough income.

If your bank turns you down, that does not mean you will end up paying rent forever.

As professional mortgage brokers, it is our job to help you present yourself in the best light. For example, your bank may have turned you down because the property you were hoping to buy was too pricey.  The first thing we would do is pre qualify you, so that you would know exactly what you can spend on a property.

We’ll also shop around for you. Other financial institutions may look at you differently. Each institution has different lending criteria and our job is to know where there may be a “fit.”

If your problem is your credit score, due to missed credit card payments or other credit history problems, we can advise you on what it would take to improve your credit score.

Other things that may make a difference between acceptance and rejection are:

A Guarantor: Someone who is able to financially back your application will help you get accepted. Of course you will have to convince THEM that you are a good financial risk, because if you default on your loan, they will have to pay. Parents, siblings, friends or even an employer may be willing to be a guarantor.

Borrow money: Increase your down payment by borrowing money. Again, parents, siblings, friends and employers may be willing to lend you money. Be sure to ask us how this will affect your application, it may not make a difference if you are near to, or over the 40% debt limit.

Get creative. If you are single, consider purchasing a shared space with a couple, or another single.

If you have any questions be sure to give us a call at 604-736-1855.

If you are planning on a home purchase, or on refinancing in the next six to twelve months, here are a few things you can do to positively affect your credit score.

Your credit score will impact how much of a mortgage you will qualify for as well as the rates you will be offered.

1. Be sure to pay off any loan or debt payments on or before their due date. Any 30, 60 or 90 day delinquencies on loans or debts will negatively impact your credit score.

2. IF you are having problems paying your debts, pay any loans or debts first. Then pay your credit card. Try to at least pay your minimum credit card payment. The lending institutions will first look at your payment history on loans similar to theirs (eg. car loans) and then will look at your credit card history.

3. Don’t max out your credit card.

4. Get rid of extra credit cards (including department store cards such as Sears, the Bay, etc).

5. Consider reducing the amount of your down payment, and paying down some of your consumer debt.

These actions will positively impact your credit score and may make the difference between being accepted for a mortgage, or not.

The major news agencies reported record employment numbers with “the largest gain yet in absolute terms and the biggest percentage increase since 2002.”

According to financial experts this pretty well ensures that there will be a rate hike increase in June 2010.  The only snag could be a financial meltdown stemming from the Greek financial crisis.

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“Unless the world economy experiences serious contagion effects stemming from the European situation, a rate hike in June is a done deal in Canada,” said Yanick Desnoyers, assistant chief economist at National Bank Financial.

It’s a done deal.  All the major Canadian Banks have now increased their Mortgage Rates, AND we haven’t even seen what will happen once the Bank of Canada gets into the act a few short months from now.

Some rates have risen up to  6/10ths of a percentage point.  This can make a significant difference in your monthly payments … and the reality is, the rates are probably going to increase even more.

Here is what the CBC News calculated on an average mortgage:

A $200,000 mortgage amortized over 25 years costs $1,051 a month at a rate of 3.99 per cent. At 4.59 per cent, that jumps $66 a month to $1,117.  Read more.

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