1.877.754.2004 Request A Quote
Google Play Ap Store
Apple AP Store

Dominion Lending Centres

Dominion Lending Centres Forest City Funding
FSCO# 10671

Mortgage Broker Ontario

  • About
    • Benefits of Our Mortgage Services
    • Mission Statement
    • About Us
    • The Owner
    • Testimonials
    • Awards & Recognitions
    • In the Community
  • Services
        • Condominium Corporation Loan
        • Snowbird Financing
        • Mortgage Life Insurance
        • Mortgages
          • Purchasing a Home
          • Refinance / Consolidate
          • Switch / Transfer
          • Home Equity
          • Reverse Mortgage
          • Spousal Buyout
          • Mortgage Renewal
          • Commercial Mortgage
        • Leasing
          • Using a Leasing Professional
          • What we Lease
          • Leasing Vendor Programs
        • Merchant Cash Advance
          • Merchant Advance Program
          • FAQ – Merchant Cash Advance
  • Calculator
  • Rates
  • Apply Online
  • Blog
  • Contact
  • About
    • Benefits of Our Mortgage Services
    • Mission Statement
    • About Us
    • The Owner
    • Testimonials
    • Awards & Recognitions
    • In the Community
  • Services
        • Condominium Corporation Loan
        • Snowbird Financing
        • Mortgage Life Insurance
        • Mortgages
          • Purchasing a Home
          • Refinance / Consolidate
          • Switch / Transfer
          • Home Equity
          • Reverse Mortgage
          • Spousal Buyout
          • Mortgage Renewal
          • Commercial Mortgage
        • Leasing
          • Using a Leasing Professional
          • What we Lease
          • Leasing Vendor Programs
        • Merchant Cash Advance
          • Merchant Advance Program
          • FAQ – Merchant Cash Advance
  • Calculator
  • Rates
  • Apply Online
  • Blog
  • Contact
You are here: Home / Blog / How to Get a Better Credit Rating

How to Get a Better Credit Rating

October 12, 2021 By Administrator

Low Credit is Spooky! Get Better Credit With The 5 C’s

Want to know how to get a better credit rating? Buying a home is an incredible step in life, but it is not without its hurdles! One of which is demonstrating that you are creditworthy, which all comes down to your ability to manage credit. This is how lenders and credit agencies determine the interest rate you pay. A higher credit rating could mean a lower interest rate and save you thousands of dollars over the life of your mortgage.

There are several attributes that lenders consider before granting credit, and these are commonly referred to as the “Five C’s” and consist of: Character, Capacity, Capital, Collateral and Conditions. Let’s take a closer look at each:

Character

The first C focused on YOU and your personal habits, which comes down to whether or not it is in your nature to pay debts on time. The determining factors for your credit character include the following:

  • Whether you habitually pay your bills on time
  • Whether you have any delinquent accounts
  • Your total outstanding debt
  • How you use your available credit:
  • Quick Tip: Using all or most of your available credit is not advised. It is better to increase your credit limit versus utilizing more than 70% of what is available each month. For instance, if you have a limit of $1000 on your credit card, you should never go over $700.
  • If you need to increase your score faster, a good place to start is using less than 30% of your credit limit.
  • If you need to use more, pay off your credit cards early so you do not go above 30% of your credit limit.

Capacity

The second component relating to your credit rating is your capacity. This refers to your ability to pay back the loan and factors in your cash flow versus your debt outstanding, as well as your employment history.

  • How long have you been with your current employer?
  • If you are self-employed, for how long?

Don’t be confused as capacity is not what YOU think you can afford; it is what the LENDER has determined that you can afford depending on your debt service ratio. This ratio is used by lenders to take your total monthly debt payments divided by your gross monthly income to determine whether or not you are able to pay back the loan.

Capital

Capital is the amount of money that a borrower puts towards a potential loan. In the case of mortgages, the starting capital is your down payment. A larger contribution often results in better rates and, in some cases, better mortgage terms. For instance, a mortgage with a down payment of 20% does not require default insurance, which is an added cost. When considering this component, it is a good idea to look at how much you have saved and where your down payment funds will be coming from. Is it a savings account? RRSPs? Or maybe it is a gift from an immediate family member.

Collateral

Collateral is what is pledged against a loan for security of repayment. In the case of auto loans, the loan is typically secured by the vehicle itself as the vehicle would be repossessed and re-sold in the event that the loan is defaulted on. In the case of mortgages, lenders typically consider the value of the property you are purchasing and other assets. They want to see a positive net worth; a negative net worth may result in being denied for a mortgage. Overall, loans with collateral backing are typically more secure and generally result in lower interest rates and better terms.

Conditions

The conditions of the loan can also influence the lender's desire to provide financing. Conditions can include: interest rate, terms, length of loan and amount of principle needed. Typically lenders are more likely to approve specific-loans, such as a car loan or home improvement loan or mortgage as these have a specific purpose, as opposed to a signature loan.

There is no better time than now to recognize the importance of your credit score and check if you are on track with the Five C’s and your debt habits. A misstep in any one of these areas could be detrimental to your efforts to get a mortgage. If you are not sure or want more information, please don’t hesitate to reach out to me today to determine your current credit score and if there are areas for improvement to help you get a better interest rate and mortgage.

Why Invest in a Home Inspection

While home inspections might not be the most exciting part of your home buying journey, they are extremely important and can save you money and a major headache in the long run.

In a competitive housing market, there can sometimes be pressure to make an offer right away without conditions. However, no matter how competitive a market may be, you should never skip out on things designed for buyer protection - such as a home inspection.

You may have a good eye for décor and love the layout of your potential new home, but what is under the surface is typically where headaches can lie. We have all heard the expression “don’t judge a book by its cover” so why would you make the most important purchase in your life without checking it out?

In fact, there are five reasons that a home inspection might just be the best $300-$500 you ever spend:

It Provides an “Out”

When buying a new house, it is always best to avoid taking chances. While a house may look great on the surface, hidden structural issues such as cracked foundation or roof damage can easily turn into expensive repairs. A home inspection can help reveal any large and/or hidden issues, which can often provide an ‘out’ for the buyer. If you find something that will cost a considerable amount to replace or repair you can go back to the seller’s agent and ask for a reduction in the price. A leaky roof may cost a few thousand to replace. Perhaps the seller would split the cost with you? It’s worth asking. If the price cannot be re-negotiated if issues come to light, then it is best to just walk away on the basis that the home will cost you too much in the long run.

Confirms Safety and Structural Integrity

Another benefit of having a home inspection is not only to find issues, but also to confirm structural integrity. During an inspection, the inspector will review everything from the attic to the furthest reaches of the basement and will look for things like mold, holes in the chimney, saggy beams or improper wiring.

Reveal Illegal Additions or Installations

Similarly to determining any safety and structural issues, home inspections can also reveal hidden additions or DIY installations that may cause trouble down the road. If the seller wired the house improperly or used substandard materials, it not only could cost you big in the future but it could even null and void your home insurance should something happen!

Forecast Future Costs

A home is an ongoing expense, much like a car. Unless it is brand new, there will be regular maintenance and updates required to replace things when they become old and inefficient. For instance, water heaters typically last for 6-10 years, the life of a good roof is around 20 years, while furnaces can last up to 25 years. The home inspection report will include an estimate on the remaining life for each of these big-ticket items, which will give you a heads up on future expected costs and provide you time to save for their eventual replacement.

Peace of Mind

Finally and perhaps most importantly, getting a home inspection is important for your own peace of mind. A home is a huge investment, and one that you will be paying off for 20 or 30 years. It is much easier to feel good about your investment after you have gone through a home inspection and you know that the house is safe and that you won’t run into any surprise problems down the road. While a home inspection isn’t free, peace of mind is priceless and a few hundred bucks is worth it!

If you’re not sure how to get started with your home inspection, please don’t hesitate to reach out to me directly for some help or a few referrals!

Fall Home Tips

Inspect Your Gutters

This time of year it is important to clean and inspect your gutters (replacing as needed) to ensure they are working properly as the rain and snow season hits. If they are clogged or damaged, it could result in a flooded interior and damaged exterior so don’t wait!

Check for Drafts

In the Fall and Winter, many homeowners are spending extra money heating their homes due to drafts, but it doesn’t have to be that way! Do a check on all exterior doors and windows to confirm if they are properly sealed. To do this, simply close a door or window on a strip of paper. If the paper slides easily, you need to update your weatherstripping.

Have Your Furnace Inspected

In Canada we are no strangers to chilly evenings! To ensure you are comfortable throughout the colder months, be sure to have your furnace inspected by an HVAC professional. They can check leaks, test efficiency, and change the filter. They can also conduct a carbon monoxide check to ensure air safety.

Fix Any Concrete/Asphalt Cracks

This one is easy to ignore thinking it will be fine, but it could easily turn into a bigger issue. When water gets into existing cracks during the colder months it will freeze and expand, causing the crack to become even larger.

Turn Off Outdoor Plumbing

Since your garden will not need attention until the Spring, it is a good idea to shut off and drain all outdoor faucets and sprinkler systems. Depending on where you live, you might also want to cover them to prevent freezing during the Winter months.

Change Your Batteries

It is a good idea annually to check that all smoke detectors and carbon monoxide devices are working. While you’re doing your Fall and Winter home preparations, this is a good time to test your existing gadgets.

Filed Under: Blog

Free Mortgage Review

Find out how much your home is worth.





    Contact a Mortgage Agent

    Oakville, Mississauga & Burlington: 905.491.6911

    Toronto & GTA:
    416.915.3155

    Hamilton & Vaughan:
    1.877.754.2004

    Naples & Miami:
    Toll Free: 1.877.239.1588
    Direct Line: 239.488.3380

    Fax:
    1.877.772.5337
    239.488.3379

    Toll-Free:
    1.877.754.2004

    Email:
    mortgageadmin@dominionlending.ca

    Request a Call Back

    Let us call you back when it's convenient for you!

      Google Play Ap Store
      Apple AP Store
      Cameron Mackie -Mortgage Broker Licence #M08008827
      Independently owned and operated ©Copyright 2023
      Dominion Lending Centres Forest City Funding - Broker Licence #10671
      Sitemap
      Request a Quote

      No Obligation Quote

        Canadian Buyer's Guide to Florida Real Estate

        Welcome

        In order to receive your free book we require some details from you.

        We do not ask for your phone number, and we will never attempt to contact you by phone, unless you ask us to. We will never sell or share, your information with third parties.

        Please forward our website link to your family and friends. They can download The Book for free as well. However, you agree, in order to receive The Book, to not copy, or forward an electronic copy of the Book, once you have downloaded it, as this will not count towards our official download statistics.

        IF YOU FIND THE INFORMATION CONTAINED IN THE BOOK HELPFUL AND INFORMATIVE, PLEASE CONSIDER USING OUR BROKERAGE SERVICES.

        Thank you and happy reading.

        Due to new anti-spam laws, you must check the I AGREE BOX, that signifies your consent to receiving The Book, and that you consent, to receive our Newsletter. You can unsubscribe from the Newsletter at any time. Please complete the form below to download the book.

          I agree to the terms above

          Certified to provide the best advice to Canadian Snowbirds

          Our brokerage is Certified to provide the best advice to Canadian Snowbirds, we provide guidance on finances, immigration, legal, tax and accounting issues that arise as a Snowbird. Additional to our expert advice, we also have a strong network of professionals to eliminate any stress common to owning property in the U.S.

          Thank you for reaching out to us, we will be in contact very soon. Have a great day!