Stricter Mortgage Lending Rules in Canada?

In the middle of December TD Bank CEO, Ed Clark, expressed his belief that mortgage rules for home
loans should be even more stringent than they already are (http://bit.ly/vbIcqD).  He would like to see federally insured mortgages go from a maximum of 30 years down to 25 years. 

What would that change mean for you, the consumer?  You would need to have very good credit and
would need to have 20% or more for a down-payment (on a purchase) or 20%+ home equity to
efinance if you wanted an amortization period of more than 25 years.  At present the maximum is 30
years amortization with less than 20% down.  Here is an example of what a change of this nature
would do on your monthly payments:


Loan Amt.           Interest Rate           Amort. Period         Term        Monthly Payment

$400,000                   3.29%                        30 yrs                 5 yrs          $1,744.71

$400,000                   3.29%                        25 yrs                 5 yrs          $1,953.00

With this scenario, you are paying approximately $208.29 more per month, $2,499.50 more per year
and a whopping $12,497.49 more for the term of your mortgage loan.

In January, 2011 the Canadian government, in an attempt to curb consumer debt/spending, decreased federally insured mortgages from a 35 year maximum to 30 years.  Do you feel even stricter home loan
rules would improve or hinder the overall state of the Canadian economy?

Improve Your Credit in 2012

With only days until the world rings in 2012, perhaps it's time to focus on improving or building
your credit history!

Here are a few simple ways to improve your beacon score so you can purchase that home or
car you hope to buy one day:

1) Apply for a Secured Credit Card.
    -applying for a credit card with a low limit of $200-$500, making scheduled monthly
     payments and keeping your balance at no more than 70% of the limit will help you to
     establish a health credit history.  Stay disciplined.  Interest rates and fees can be high
     on these cards, but before you know it (12-18 months) you will likely see signs of
     credit improvement.

2) Pay Rent and Utilities on Time.
    -many individuals do not realize the importance of paying rent and utilities on time. 
     Believe it or not, if you miss rent or utility payments, it will be report to credit bureau
     agencies.

3) Limit Credit Inquiries.
    -before purchasing a car, home, retail credit card, cell phone service, etc...be sure
     you are 100% positive you are ready to take that step.  The more credit inquiries
     you have, the more your beacon score will decline.  As a mortgage broker, I always
     make sure my clients are 100% ready to purchase or refinance before pulling their
     credit.  Thinking you might be ready isn't good enough reason.

4) Avoid Collection Agencies.
    -even small unpaid bills that go to collection agencies will affect your credit.  You are
     better off to pay an account balance in question, than to leave it.  Don't think you
     owe that $25 to your local video store?  Pay the bill and fight the charges afterwards. 
     Avoiding little blemishes to credit can go a long way in building a healthy credit history.

5) Check Credit History Annually.
    -it is always a great idea to check your credit history on an annual basis.  Mistakes do
     happen from time-to-time, and checking for errors on your credit report will allow you
     to rectify issues quickly.  Consumers are denied credit every day because of small error
     on credit reports.  It is also a great way to monitor and track the progress you are making
     on building your credit.

Check your credit report today by visiting Equifax or TransUnion.