Thursday

Your credit score

Believe it or not, your monthly bills are the ticket to your financial well-being. The way you handle those bills can make a difference that you can measure on the bottom line of your family finances.
A good credit score (the higher, the better) is rewarded with good loan rates and access to money when you need it. A low credit score can cost you extra – even on your mortgage, where the debt is secured against your home. And you may be refused credit just when you need it most.
You may want to check your own credit score once a year – to ensure that all the information in your file is accurate. You have a right to access your own credit records through a service like Equifax or Trans Union. There may be charges for mailing or internet downloading of your files, but it can pay to know your own credit score.
It’s helpful to understand what’s behind that credit score: what impacts your score and what lenders are looking for when they check your credit.
When those bills come in, do you pay them on time? Your payment history is a significant factor in your credit score. If you have paid bills late, had an account that has gone to collections, or declared bankruptcy, then your credit score will drop accordingly.
How much money do you owe? Lenders will look for a nice comfortable buffer between your debt and your credit limits. If your credit card or your line of credit are always teetering at the top of their limits, that is likely to have a negative effect on your credit score.
How long is your credit history? Lenders will be interested to know how long you’ve been a borrower. If you have a long credit history with a good payment record, you will score high in this component. A short credit history makes it difficult for lenders to assess your risk – though if you pay your bills in a timely way and maintain low credit balances, these good habits can offset a short history.
Have you applied for new credit lately? A lender will be able to see if there have been other “inquiries” on your credit report. If you have requested new credit several times in a recent period, your score may be affected. Don’t worry about routine checks or inquiries from your existing creditors. Those inquiries should not impact your score.
How much credit do you have and what types of credit do you use? Both too much and too little credit can lower your credit score. Lenders will be looking for a record of established credit accounts with good payment histories. Too many credit cards, or accounts with high-interest finance companies can affect your credit score.
So what doesn’t affect your credit score? Personal information such as your race, religion, sex or marital status are neither recorded nor scored in your credit history. And, perhaps surprisingly, your salary, occupation and employment history are also not relevant to your credit history.
Whether or not you intend to take out a mortgage or borrow money, you should check your credit history and ensure that all the information contained there is accurate. You want to know what any future lender can see. Talk to your mortgage broker for more information.

Wednesday

Pre-arrange your mortgage

Fewer people are getting their mortgage pre-approved when buying a home for the first time according to a survey done by Canadian lenders. Survey shows that percentage of first-time home buyers who pre-arranged a mortgage has declined from 73 percent in 2001 to 62 percent today. This trend shows that almost half of first-time home buyers are not doing any planning for their mortgage. Home mortgage should be part of your overall financial plan or you could end up paying thousands of dollars extra to your lender. A pre-arranged mortgage gives you time to negotiate the terms and conditions of the mortgage other than the interest rate, And not to mention the protection against fluctuating interest rate for up to 120 days. Getting a mortgage pre-arranged doest not cost you anything. Talk to your mortgage broker to pre-qualify and shop for a home with confidence.

Tuesday

Indian mortgages get expensive

ICICI Bank Ltd., raised the benchmark interest rate on all floating-rate loans, including mortgages, by 1 percentage point to 12.75 percent, thanks to the Indian central bank's monetary policy. This move came on top of a similar increase in February, and a half-percentage-point one in December. Central bank is punishing homeowners with higher interest rates and the government is rewarding them with big tax exemptions. There seems to be no clear policy on this issue. With the Indian growing at 9% /yr the interest rate relief may not come to India for some time.

UK mortgage demand lower

The number of mortgages approved in March fell by 8 per cent compared to the same month a year ago according to the British Bankers' Association. This is even when the average mortgage taken out this year was 12 per cent higher than in March 2006. Overall, there were 198,000 mortgages approved for all purposes in March, representing £22.3 billion. Net lending rose by £5.1 billion during the month. Economists say that a total interest rate rise of 0.75 percentage points over the past nine months is finally forcing borrowers to change their behaviour. Talk to your mortgage broker for more information before buying a home or condo.

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