By: Zukan Nedim

How Your Credit Score Affects You

Your credit score is critical to your financial health, as it rates your creditworthiness. Essentially, your credit score determines how much money you can borrow, what interest rate and how much in fees you'll have to pay. Your credit score is based on your credit report, which includes information about your credit history - your payment history, how much debt you owe, how long you've had credit, the types of credit you have, and how often you apply for credit.

In Canada and the US, most lenders use the FICO credit score system, which ranges from 300 to 900. The higher your credit score, the more likely you will be approved for a mortgage and the better the terms you'll receive.

For example, if you have a credit score of 750 or higher, you can get a mortgage with a low interest rate and a small down payment. A lower interest rate means lower monthly payments, which can save you thousands of dollars over the life of your mortgage.

On the other hand, if your credit score is below 600, you may have difficulty getting approved for a mortgage and may be required to make a larger down payment or pay a higher interest rate. A higher interest rate means higher monthly payments, which can make it harder to afford your mortgage payment and other expenses.

Significant Factors Impacting Your Credit Score

Here are the most important factors affecting your credit score:

#1 Defaulting on a Loan Defaulting on a loan has the most severe negative impact on your credit score. It means you have failed to repay the loan as agreed, and it can stay on your credit report for up to seven years. A default can significantly reduce your credit score and make it challenging to get approved for credit in the future.

#2 Late Payments

Payment history is the most significant factor determining your credit score. Late and missed payments significantly reduce your credit score. The longer you delay your payments, the more it negatively affects your score. Even one late payment can have a considerable impact on your credit score.

#3 Credit Utilization

Credit utilization is the ratio of outstanding credit card balances to credit limits. A high credit utilization ratio indicates that you are using a significant amount of your available credit, which may suggest that you are overextended and need help to make payments. Keeping your credit utilization ratio below 30% is ideal for maintaining a good credit score.

#4 Credit Applications

When you apply for credit, the lender performs a hard inquiry on your credit report. Too many hard inquiries in a short period can lower your credit score as it suggests you are actively seeking credit and may be at a higher risk of defaulting on your payments.

#5 Credit Accounts

Closing credit accounts also negatively impacts your credit score, especially if you have a long credit history. Creditors prefer to see that you have a lengthy credit history and can manage multiple credit accounts effectively. Closing an account will reduce the average age of your credit accounts, which can harm your credit score.

Maintaining a Healthy Credit Score

Here are some tips to keep your credit score healthy:

  • Pay your bills on time every month
  • Keep your credit card balances below 30% of your credit limit.
  • Don't apply for too much credit. Only apply for credit when you need it.
  • Apply for credit products with lower interest rates you will likely be approved for (e.g. personal loans)
  • Check your credit report regularly. Errors on your credit report can hurt your score, so you must check your report regularly and dispute any errors you find.
  • Build a long credit history. The longer you've had credit, the better it looks to lenders. If you're new to credit, consider getting a secured credit card. With a secured card, you'll need to make a deposit upfront, which is collateral for your credit limit. Making regular payments on a secured card can help build your credit history and improve your score.

Building Up Your Credit Score

Improving your credit score takes time and effort, but because it results in getting the best terms on your mortgage, it is worth it. Here's how you can improve your credit score:

#1 Get a copy of your credit report

The first step to rebuilding your credit score is to get a copy of your credit report. You can request a free copy of your credit report from Equifax or TransUnion in Canada. Review your credit report carefully to identify any errors or inaccuracies that may negatively impact your score. If you find any errors, dispute them with the credit bureau.

#2 Pay down your debts

While having debt - if you are paying it off on time - helps you build your credit score, the amount of debt you have limits the amount you can borrow. If you have high credit card balances or other debts, work on paying them down as quickly as possible. If you're using a significant amount of your available credit, this may suggest that you are overextended and may struggle to make payments. The less debt you have, the better your credit utilization ratio will be, which can help improve your credit score.

#3 Start budgeting to pay your bills on time

Start paying your bills on time with no exceptions. Make this the #1 priority each month. Creating a monthly budget helps you take care of your financial health. You can use a budgeting app or a Google or Excel sheet to plan your expenses.

#4 Seek professional help

If you are struggling to rebuild your credit score, consider seeking professional help from a credit counselor or financial advisor. They can help you develop a plan to improve your credit score, manage your debts, and create a budget.

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By: Jordan Matchett

How to Save Thousands of Dollars in Interest and Pay Your Mortgage off Faster

There are a few easy ways to make extra principle payments that can save you a ton of money in interest expenses and get you mortgage-free sooner than you thought possible. Here are a few simple strategies you can use:

1. Round your monthly payment up

The results of this simple strategy can save you a fortune and drastically reduce the length of your mortgage.

As an example, if your monthly mortgage payments were $734 dollars a month, but you rounded it up to $800 per month, you would save more than $48,000 in interest payments, and reduce the length of your mortgage by 7.5 years!

2. Make One Time Pre-Payments Using Your Income Tax Refund

This is an easy way to save money and shorten your mortgage. For example, if you have a $100,000 mortgage, and you have a $1000 tax refund this year, you take apply that refund to your mortgage. Over time, this will save you more than $8600 and shave 1 year and 1 month off your mortgage! That's another amazing result from a simple strategy.

3. Choose a 15 Year Mortgage

If you can afford it, you are far better off getting a 15 year mortgage instead of 30. It won't cost you much more, and the interest savings are truly incredible.

If you have a mortgage of $100,000 at 8% interest over 15 years, your monthly payment would be about $200 more, but you'd end up saving $92,083 in interest over the life of your mortgage!

Using these strategies is the easiest way to reduce your interest expenses and shorten your mortgage period.

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By: Jordan Matchett

How to Avoid a Money Pit: Be on the Lookout for these 6 Warning Signs That Could Mean Expensive Repairs...

Many people think that serious defects in a home are easy to spot, but the truth is, often the most serious and costly problems can only be detected upon very close inspection. When you are considering buying a home, look for the following six telltale signs of serious problems...

1. Roof

Leaks are the most common problem with roofs, and are tough to detect from outside. However, from inside an attic, you can often see water marks where there is a leak.

2. Plumbing System

Make sure you are confident that both water systems: the one that brings fresh water in and the one that takes sewage out are functioning well before signing on the dotted line.

3. Electrical Systems

Before you agree to buy you should make sure that you can run all of the appliances you want to and even power tools at the same time without having a power failure. You also want to make sure that the electrical system is safe and does not present a fire hazard.

4. Heating and Cooling Systems

Be sure to thoroughly inspect the heating and air conditioning systems in any home you are considering purchasing.

5. Bad Paint and Signs of Rotting

The paint inside and outside the house can reveal a lot about the condition of the underlying material. Check several places on several walls, using your eyes and a screwdriver for poking.

6. Cracks and other important signs

Cracks in walls, doors not closing properly and uneven floors can all be signs that there is a problem with the foundation. If the foundation is not strong, the entire house could literally collapse, so you should carefully check for these signs. A bad foundation may not mean imminent disaster, but it could be used to bargain for a lower sale price, or you could ask to have the owner repair it before the sale.

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By: Jordan Matchett

5 Costly Mistakes Home Buyers Keep Repeating

Purchasing a property is probably the most significant investment you're about to make. And it's quite normal that your emotions come into play with such a huge and personal purchase. Especially for first-time buyers, buying a new place can seem overly complicated and even confusing.

Instead of only focusing on finding your dream home or being a home improvement expert, you should be as rational as you can with your decision, no matter how personal this purchase is. Knowing what problems to expect, you can avoid expensive errors and feel more confident while shopping.

Here are the 5 most costly mistakes buyers keep repeating (but you don't have to):

#1 Skipping Mortgage Pre-Approval

Pre-approval is necessary before placing an offer on a home or even before you go house-hunting. It doesn't only give you an overview of what budget to plan for. Most sellers won't accept offers nowadays without a pre-approval letter. Be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, such as finance a car purchase.

#2 Not Getting a Home Inspection

A home inspection is an essential part of the home-buying process. It can uncover hidden problems or defects that may not be apparent during a walkthrough. Skipping a home inspection to save money or speed up the buying process can cost you much more in the long run. A professional inspector can identify issues with the property's structure, plumbing, electrical, and HVAC systems that could lead to costly repairs or replacements.

#3 A Fixer-Upper Is Not Always a Good Idea

Yes, a fixer-upper sounds like a good idea until you actually have to start fixing it. If you are on a strict budget, look for homes the potential of which has yet to be realized. The upgrades you make will increase the value of your home and thus give you a bigger budget for your next purchase. However, be careful not to overestimate the type and amount of work you can do by yourself. Also, consult your real estate agent to learn what upgrade will add the most value to your home.

#4 Overbidding for Fear of Losing Out

Jumping in too fast or waiting too long to put in an offer are both risky in terms of cost and what kind of property you might end up with. To make sure you are not overbidding or repeatedly writing offers with no success, hire an experienced real estate agent. An experienced agent knows how much above or below the asking price properties in an area are sold and can help you devise an effective offer strategy.

#5 Not Shopping Around Enough

Many buyers think they're best off taking a mortgage with the lender they currently bank at. But this may not be the case. You can use a mortgage broker to learn about the different options you have at your disposal. Always make sure to have a breakdown of the total costs of each mortgage option on the table, including penalties for breaking the mortgage early.

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By: Jordan Matchett

Upsizing Your Home

After more than 10 years working as a real estate agent and broker in Durham Region and Peterborough County, I’ve worked with many clients that are trying to decide if now is the right time to upsize their home. Upgrading to a larger home can be a big step, and is often precipitated by exciting life changes, which is why working with upsizing families is one of my favourite things to do. Whether it’s getting married, starting a family or growing your family, it’s an honour to be involved in these milestones in some small way.  it's essential to make sure that you're making the right decision for your family's needs, goals and budget. In this blog post, I'll outline some of the key questions to ask yourself when considering if now is the right time to upsize your family home.
 
Is your family growing or so you plan on growing it in the near future?

 One of the most common reasons families choose to upsize their home is to accommodate a growing family. Whether you are already expecting or if you are planning to grow your family in the near future, you’ll want to consider whether your current home is going to work for your future family. If you have a growing number of children, or just growing children, you may need to consider a larger home with more bedrooms and living spaces. Your small starter home or condo may be perfect for you now, and may even accommodate life with a young baby but along with children comes more stuff (and lots of it). Along with space, young children also consume a lot of time, making moving with young children more challenging and more stressful. It may be worth considering if it makes sense for your family to make a move before baby arrives.
 
Do you need more space for you and your family’s hobby and activities?

Many families enjoy spending time together. Whether it’s playing board games, having movie nights or just enjoying a good meal... You want to make sure that your home has spaces large enough to enjoy your family’s favourite activities together. However, as children grow you may also want to be able to have separate living spaces for them (and you) to enjoy activities separately. Your children’s interest may also develop into hobbies that require more storage space (like playing sports, camping or ). If your current home doesn't have enough space for your family’s hobbies and activities, it may be time to upsize. You may want to consider a home with a larger living room, a finished basement or family room, and a larger backyard for outdoor activities.
 
Does your current home have enough storage space for your family?

As your family grows, so does your need for storage. It’s not just your hobbies that take up space, holiday decorations, exercise equipment, things your children have outgrown, vehicles, tools and home renovation supplies… the list keeps growing along with your family. If your current home is lacking storage space and you don’t think you can purge anymore of your belongings, you may need to consider upsizing to a home with a larger basement, a garage, a storage room or outbuildings.
 
Would having a dedicated space for a home office improve your quality of life?

With current trends (and a global pandemic) pushing more people to work from home and companies to put infrastructure in place to accommodate home based work, having a dedicated workspace has become a critical need for many families. Working from home has a number of benefits but most importantly it can help provide your family with flexibility and more free time, while you are growing your family. If working from home is an option for you, or your partner, you may want to consider having a dedicated home office space to make sure it is feasible and functional for you and your family. If you there isn’t a space in your current home to dedicated to a workspace, you may need to consider upsize to a home with an office or a separate room that can be converted into an office.
 
Does your current home have all the amenities that you want or space to add them in the future?

If your current home is lacking some of the comforts or amenities that you and your family are going to want (now or in the future) you’ll want to identify what those are so you can decide if they can be added to your current home or if you need to upsize to a larger home to make it your dream home. Whether you would like to have a spa like ensuite, an extra family bathroom, a chef’s kitchen, or a backyard big enough to accommodate a pool and outdoor rink, you may want to upsize to a home that can accommodate all of those amenities before you start adding them to your current home. Knowing what amenities your family wants (now and in the future) will also ensure that we can make sure your next has some of them already and the space to add all the things your family wants to make their next house a home.
 
Are you financially prepared to upgrade your home?

Upgrading to a larger home can be a significant financial decision, and it's important to make sure that you're in a strong financial position before making the move. Talking to a financial planner and getting pre-approved by a mortgage broker are important first steps in getting prepared to upsize. Don’t forget to factor in closing and moving costs, as well as whatever work you’ll want to do to your new home to make it your own. Consider your current income, savings, and debts to determine if you can afford to take on a larger mortgage payment. Don’t forget to check the current interest rates because unless your mortgage company will allow you to port your mortgage or blend your rate, you’ll have to break your current mortgage and get a new one at today’s rate.
 
What are your long term plans and goals?

Consider your long-term plans before making the decision to upsize. If you are planning to grow your family further, you may want a home that can accommodate that. If you plan to stay in your home for many years, it may make sense to invest in a larger home that meets your current and future needs. If you want to retire in your next home you may want to look at bungalows or a home that you can add a secondary suite to once your children leave home. Upsizing can also be an opportunity to use equity in your home as leverage to keep your current home as a rental property but you’ll want to make sure you are making purchases with the future in mind. Regardless of what your family’s goals are, it’s important that you consider them when deciding if now is the right time for your to upsize your home and make sure that you are sharing your goals with your Realtor so that we make sure your next move is helping you achieve your goals.
 
What is the current state of the real estate market?

Finally, you will want to consider the current market conditions when deciding if it's time to upsize your family home. The real estate market always ebbs and flows, once you’re in the market, your position in it is pretty relative, so often this is not the deciding factor when deciding if it’s time to move. Most of my clients have made the decision based on the needs of their family and then the discussion turns to finding the best strategy for achieving your family’s goals in the current market. When upgrading your home in a buyers’ market, you’ll have more time to make decisions and likely more inventory to choose from to find the ‘perfect’ next home but it may take more time to sell your current home, when the time comes. In a seller’s market, there won’t be any problem selling your home quickly and often for more than you expected but you’ll have to be prepared to make decisions about your next home quickly and understanding exactly what you family needs in your next home is going to be critical.
 
Deciding if it's time to upsize your family home is a big decision that shouldn’t be taken lightly. While there is a number of factors to consider when making your plans, it really comes down to what your family needs. A house is much more than an investment, it’s where you and your family spend most of their time together, it is a reflection your family’s personality and it’s the place that your children go to sleep every night. By taking the time to think about your family's needs, financial position, and the market conditions, you will be in a good position to make an informed decision that is right for you and your family. Whether you are ready to make the leap to your next home or if you have questions that I can answer about the process, feel free to reach out. I’d love to help you and your family with your upsizing journey and make a plan to help your family achieve their goals through real estate.

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By: Tyler Abbott - True North Sports Camps

How Sports Build Healthy Communities

Sports have the power to do pretty much anything. They can provide an escape for people from their day-to-day lives, help promote a healthy lifestyle and be the source of steep personal accomplishment. But maybe the most important thing they do?

 

Bring people together.

 

In the middle of August, the city of Houston suffered one of the worst natural disasters in American history. Hurricane Harvey claimed the lives of 68 people and caused over $100 billion in damages across the state of Texas.

 

The Houston Astros – a franchise that had never won a World Series before – put the city on their back and captured their first ever championship. Houston mayor Sylvester Turner said the Astros elevated the city to another level. When people needed them most, sports were there.

 

While being there in times of trouble is invaluable, it doesn’t take a natural disaster to bring people together. Sports can unite people at a local level too. Earlier this year, Whitby got to experience the NHL’s ultimate prize – the Stanley Cup. The Hockey Hall of Fame’s Phil Pritchard brought Lord Stanley to Whitby’s Durham College for hockey fans to come and touch, get a picture with or lift the Cup. Some star struck fans did all three.

 

Durham is Pritchard’s alma mater and he said it was great to make his former home one of the Cup’s many stops. One fan, among the hundreds that showed up in Whitby on Jan. 8, told durhamregion.com seeing the Stanley Cup was a “bucket list moment.”

 

Another thing sports do? Build relationships. They allow for interaction between friends and offer the ability to make new ones. Often people will build life-long relationships and be introduced to communities they otherwise would not have met through competition and team-building.

 

Sports also encourage healthy lifestyles, which can increase the collective health of a community. In fact, Canadian Physical Activity Guidelines recommend that children aged five to 17 get at least 60 minutes of moderate-to-vigorous intensity aerobic physical activity each day to meet the required criteria of a healthy lifestyle.

 

According to Statistics Canada, only 14 per cent of children aged five to 11 meet Canada’s physical activity guidelines and an even smaller percentage from the ages of 12 to 17 reach their target.

 

Canadians have to do better, especially at younger ages. But there’s a way.

 

True North Camps is coming to Whitby for the first time ever this summer. True North has been one of the leading Greater Toronto Area sports camps since it was first established as North Toronto Baseball Camp by a group of friends in 2006 who had a passion for teaching the game they love.  

 

True North chose to expand to Whitby for two main reasons. Firstly, there is an incredible passion for youth athletics in Whitby, Pickering, and Oshawa. From baseball to hockey, and soccer to football, Whitby has an insatiable appetite for sports. Secondly, the facilities are first class. We’re thrilled to be running our programs at Kelloryn Park, featuring two diamonds, a track, and football field.

 

With camps like flag football, baseball, basketball and multi-sport, True North is committed to creating a fun atmosphere for kids of all ages to get active while developing relationships that can last a lifetime.

 

With knowledgeable staff that receive top-notch training, kids of all skill levels participate in a variety of activities and games that are sure to help make the summer unforgettable.

 

True North’s Whitby division offers baseball and multi-sport camps that run weekly from July 3 to Aug. 17 for kids aged four to 14. True North has expanded rapidly throughout the GTA over the past several summers and has received rave reviews from both parents and kids. For schedules and availability, click here.

 

There’s no denying it. Sports can provide an escape in difficult times, bring people together, build or form new relationships and encourage healthy lifestyles, which build healthier and happier communities. With all sports that offers, it’s essential kids get involved at an early age. 

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