Back to School: Credit Clean Up!.

It’s time to go back to school… for your finances! The fall is the perfect time for a credit clean-up so that you are ready for the holiday spending season – and anything else the year can throw at you!

When it comes to cleaning up credit, there is no better time than now to recognize the importance of your credit score and check if you are on track with your habits. To get started with your credit clean-up, there are a few things you can do:

1. Pull Your Credit Report: For most of us, our credit score is something we only think about when we need it. However, if you are unsure of where you stand, this is a great time to find out! The Fair Credit Reporting Act lets you get one free credit report every year through Equifax or TransUnion. Pulling your own credit report results in a “soft” inquiry on your report and will not affect your credit score. Click here to get your free credit report today!
2. If You Find Errors, Dispute Them: When doing your annual credit score review, it is a good idea to go through line-by-line and confirm no errors. If you find any errors, report and dispute them immediately as they could be affecting your score.
3. Consolidate Your Loans: One of the best tips for managing your credit and working towards future financial success, is to consolidate your debt. Consolidating debt means reducing multiple loans to a single monthly payment, which typically has a lower interest rate allowing you to maximize spend on the principal amount.

Once you have put the effort into cleaning up your credit, you will want to keep it that way! A few tips for maintaining your credit and maximizing your financial future include:

1. Pay Your Bills: This seems pretty straight forward, but it is not that simple. You not only have to pay the bills, but you have to do so in full AND on time whenever possible.  Paying bills on time is one of the key behaviours lenders and creditors look for when deciding to grant you a loan or mortgage. If you are unable to afford the full amount, a good tip is to at least pay the minimum required as shown on your monthly statement to prevent any flags on your account.
2. Pay Your Debts: Whether you have credit card debt, a car loan, line of credit or a mortgage, the goal should be to pay your debt off as quickly as possible. To make the most impact, start by paying the lowest debt items first and then work towards the larger amounts. By removing the low debt items, you also remove the interest payments on those loans which frees up money that can be put towards paying off larger items.
3. Stay Within Your Limit: This is key when it comes to managing debt and maintaining a good credit score. Using all or most of your available credit is not advised. Your goal should be to use 30% or less of your available credit. For instance, if you have a limit of $1000 on your credit card, you should never go over $700.

NOTE: If you find you need more credit, it is better to increase the limit versus utilizing more than 70% of what is available each month.

Whether you qualify for a mortgage through a bank, credit union or other financial institution, you should be aiming for a credit score of 680 for at least one borrower (or guarantor). If you are ready to start your home-buying journey, or are looking to refinance your existing mortgage, a DLC Mortgage Expert can help you review your credit score and financial information to help you get the most from your money.

Let’s face it, mere mention of the word “money” can make people shift in discomfort. In an era in which the veils are being lifted off many societal taboos, a shroud of shame hangs stubbornly over money talk – we’re taught to fear it, we’re taught it’s too complicated, and those are all messages meant to disempower.

It’s time to push past the taboo, and normalize talking about money. Disrupt it by talking about it – openly and frankly – with your partner, your friends, your family, and your colleagues. Speaking of partners, it’s important both parties are open with one another about their fears, feelings, and goals in regards to money. This is particularly important in opposite-gender households, where research shows that the male partner takes the financial lead in most homes.

stnce Senior Program Specialist, Sarah Zandbergen, has this to say about the hesitation to discuss finances with partners: “It can be difficult to bring up, no question, but if you’re sharing your life with someone, finances are bound to come up. A staggering statistic we came across in our research is that 90% of women will be the sole financial decision-maker in their family at some point in their lives. Knowing this, there is absolutely no excuse to defer ownership to someone else.”

Smash the stigma, and get radically transparent about your salary, your financial situation, your debts, your windfalls, and your savings goals.

And, hey, we get it – there’s a sense of comfort, albeit a false one, that comes with avoiding fiscal responsibility, because it temporarily absolves us of having to do anything, but remaining on the sidelines gives money a leg up on you. So if you want to be truly in control, increasing your knowledge about money, and how to save it, is a critical part of the confidence-building process

When it comes to finding your perfect home, there are so many more options for potential homeowners! From a single-family dwelling to a townhouse to a modular home, the choices are seemingly endless. But, before you start widening your search, let’s take a look at what makes these home types different – and which one is perfect for you!

Not surprisingly, almost half (53.6%) of Canadian households occupy the classic single-family detached house. In a distant second are condominiums with over a quarter of homeowners (27.9%) opting for this type of home (especially in metropolitan areas such as Toronto and Vancouver). Next come duplexes at 5.6%. The remaining homeowner choices are other housing options, such as semi-detached houses, mobile or modular homes and other single-attached dwellings such as urban infill homes, which come in at 12.9%.

So, which of these options is right for you!? Let’s take a look starting with the most popular option.

single-family detached

This is a single-family, stand-alone house that sits on its own lot and is the most common type of home you will find. As these are detached dwellings, they provide more privacy with less noise from neighbors. They also tend to be larger dwellings (complete with a yard!) which gives you the space and freedom to really make it your own. Due to the popularity of these homes, there is often high demand in them which can drive up selling prices. In some cases, this can lead to bidding wars and houses that sell for well over the asking price.

single-family, semi-detached

These homes are suitable for a single family and are typically attached to another house on one side. When compared to single-family detached homes, their semi-detached cousins are often more affordable to both buy and maintain. With this affordability does come somewhat less privacy and protection from noise due to the shared walls on one side. However, these homes typically have separate entrances and retain most of the privacy of a fully detached home.

duplex

These are considered structures with two single-family units on separate levels. These are great options for individuals looking to reduce home purchase and carrying costs – live in one unit, rent the second! This type of home also provides unique flexibility for older families, giving you the option to move adult children or aging parents into the second unit as needed.

As expected, these units offer less privacy than a single-family detached home and can sometimes have increased noise through the floor or ceiling.

townhouse or row house

Another popular home option are townhouses or ‘row houses’ as these are a row of single-family homes, which are connected on both sides to the next home (excluding the end unit, which is only connected on one side). Townhouses typically have private yards but, in some cases, it may be freehold or condo-style with shared ownership rights and responsibilities.

Due to the nature of these homes, they are typically more affordable than detached or semi-detached homes and also easier to maintain. Similarly, to duplexes however, these home types have less privacy and may have noise from shared walls. There are also monthly maintenance or strata fees to consider for the unit.

condominium

These are low- or high-rise buildings containing multiple apartment units. These units are individually owned, with shared ownership rights and responsibilities over the building and the common area. Condos are excellent starter homes for single adults, or couples, as they are affordable and require minimal maintenance. Some buildings even have shared amenities, such as a fitness center or swimming pool or party room.

Always check for these amenities and if you would be interested in using them. If not, why pay for them? In this case, you might be better off finding a condo with less amenities and lower strata fees. Additional considerations for condos are that these are typically much smaller than detached or semi-detached homes and there is generally more noise (depending on your buildings structure and soundproofing) and less privacy due to common areas.

modular or mobile home

Growing in popularity are modular homes, which are prefabricated homes delivered to a home-site for installation. These homes are owned by the individual, while the land it sits on could be rented or owned outright. Similar to modular homes, are mobile homes such as campers and RVs.

These types of homes are highly affordable and extremely flexible; if you relocate, you can sell the mobile home with the property or keep the home and relocate it! As these are less common and somewhat newer home types, there is less resale demand than other housing types and they are much smaller than a detached or even a condominium. If renting land in a mobile home community, there are also those costs to consider.

carriage house or urban infill

A carriage house is located on the periphery of a single-family detached house. Similarly, are urban infill homes which are a modern solution to crowded cities whereby existing space in established residential or commercial areas has been repurposed to maximize density and reduce urban sprawl.

These homes are unique in that they are often located in interesting, urban environments and have their own character when compared to other homes. They are also generally less expensive than a single-family detached home and some of the other types on our list. That said, there is potential for noise pollution if you are in a busy location. Due to the size, there is also limited inventory and limited or non-existent yard space. But if you’re looking for something affordable and unique, these are perfect for you!

Finding the right home to suit your needs means considering your lifestyle and budget now, as well as where you’ll be a few years down the road. Want more information or need help deciding the best option for you? Contact a Dominion Lending Centres Mortgage Professional to learn more about your options when it comes to buying and owning a home.