Thursday, 31 January 2013

My Credit score is 788: What does it mean?

My credit score is 788: What does it mean?

January 21, 2013 By Robb Engen

A good credit score is important if you plan to borrow money because it means you’ll qualify for

lower interest rates on loans and have access to a variety of credit offers.

Your credit score indicates the risk you represent for lenders when compared to other consumers.

Higher scores are viewed more favorably. The two credit-reporting agencies, Equifax and

TransUnion, use a credit scoring scale from 300 to 900.

I've sent away for my free credit report a couple of times to check for errors, but that report

doesn't include your score. I was curious and so last week I went to the Equifax website and paid

$23.95 for my credit report and credit score online.

My credit score was 788, which isn’t perfect, but most lenders would consider it pretty good.

Credit Score

300 to 559 560 to 659 660 to 724 725 to 759 760+

Quality Poor Fair Good Very good Excellent

% of population 4% 10% 15% 14% 57%

Your credit score is derived from a number of factors including:

Payment history – carrying a balance on your credit card, or missing a payment

Any collection or bankruptcy recorded against you

Outstanding debts – the limit on your credit card (is your balance close to your limit?)

Account history – how long have you had credit?

Number of recent inquiries made about your credit report

Type of credit you’re using – a mix of credit cards and loans

The most important factors are your payment history, whether you’ve ever declared bankruptcy,

and the amount of your outstanding credit balances.

Here are six easy steps to improve your credit score:

Pay your bills on time

: Utility bill payments aren’t recorded in your credit report, but some cell

phone companies will report late payments to the credit-reporting agencies, which may impact

your score.

Pay your bills in full

: If you’re not able to do this, make sure to pay the required minimum

amount shown on your monthly statement.

Stay below your credit limit: T

he higher your balance, the more impact it has on your credit

score. Keep your balance under 50 per cent of your available limit at any time.

Keep credit applications to a minimum:

If too many lenders ask about your credit in a short

period of time, it can have a negative effect on your score.

Keep a credit history:

You may have a low credit score because you don’t have a record of

borrowing money and paying it back.

Fix errors in your report

: Ask for a free copy of your credit report once a year and check it for

accuracy. If you notice any errors, get them fixed as soon as possible.

You shouldn't obsess over your credit score – it only matters if you plan on borrowing. So if

you've borrowed responsibly in the past you shouldn't have any trouble getting credit in the future.


Kevin & Faye Kitzman

Sales Representatives

Remax Real Estate Centre

Direct : 519-577-0603



Faye Kitzman

Mortgage Agent

Mortgage Intelligence



Friday, 25 January 2013

Monday, 21 January 2013

Housing market: Prices steady, but sales down

Housing market : Prices steady, but sales down 17%
By Susan Pigg

So far it’s looking like a soft landing for Canada’s housing market, analysts, economists and realtors generally agree, despite the fact home sales were down 17.4 per cent in December over a year earlier, according to figures released Tuesday by the Canadian Real Estate Association.
With prices up an average 1.6 per cent across Canada in December year over year — six per cent in Toronto — housing experts are looking to the spring market, the busiest time of year for home sales, as the best barometer of where the housing market is ultimately headed.
So far it is “defying gravity and logic,” says Queen’s University real estate expert John Andrew.
“It appears that sellers are refusing to drop their prices, clinging to the elevated home prices they have grown accustomed to,” while buyers have headed for the sidelines, anticipating that interest rates will remain stable but house prices drop.
“The result is standoff between vendors and buyers, and homes are simply not changing hands.”
The cooling of the Canadian market — with the most pronounced downturns in sales hitting Vancouver (31.1 per cent year over year in December) and Toronto (down almost 22 per cent annually) — “is just what the doctor ordered,” says Bank of Montreal economist Sal Guatieri.
Just since July, when Ottawa introduced tighter mortgage lending rules restricting amortizations to 25 years instead of 30, house sales across Canada have declined 6.6 per cent.
According to the CREA figures, almost every major Canadian city saw double-digit sales declines, with the exception of booming Calgary where sales were up in December 7.2 per cent year-over-year.
Prices were up in Calgary by 6.9 per cent, outstripped only by Regina (up 15.9 per cent last month over December, 2011) and London/St. Thomas (up 12.3 per cent.)
With a typical house in Toronto now costing about seven times median income, and a staggering 10 times median income in Vancouver, the cooling of the market should allow wages to start to catch up, says Guatieri.
“We’re coming off a decade-long housing boom in this country, and for sales to still remain this strong is pretty good.
“If we do see the spring market roaring back, in some ways we would be comforted, but I think we’d be more worried about the possibility of a bubble and that could trigger a further tightening of mortgage rules which could hit as interest rates do start to move up over the next few years.”
Housing analyst Ben Rabidoux agrees “the spring market is going to be huge” in terms of telling where the market is heading. He thinks it’s too early to know if Vancouver and Toronto can avoid hard landings and substantial price declines, given baby boomers aren’t driving sales in big numbers anymore and the new mortgage rules have knocked buyers out of the market.
“It’s a soft landing at this point, but if we continue to see sales trends (downward) like this, it will impact prices.
“A soft landing and a crash both start the same way.”

Kevin & Faye Kitzman
Sales Representatives
Remax Real Estate Centre
Direct : 519-577-0603
Faye Kitzman
Mortgage Agent
Mortgage Intelligence

Thursday, 17 January 2013

How do Real Estate Pros price a listing?

A very accurate saying is that "Any home will sell once you get the price right." Of course, this is usually said from the perspective of dropping a price until it's too attractive to pass up. Actually, the accurate pricing of your home prior to listing is as much an art as it is a science.

The Science:

Computers have helped a lot in the data and science aspects of pricing homes for sale. The real estate professional looks at many data sets in the process, including:

  • Records of recent sales in the neighborhood or area.
  • Currently listed comparable homes.
  • Historical trends in price appreciation.
  • Feature comparisons for mechanical value adjustments for differences.


Most of these items are a gathering of numbers, thus our placement of them under the Science aspect of pricing or valuation. A real estate professional has systems in place, some through the Multiple Listing Service, to gather appropriate information and data for the valuation process.

The selection of appropriate comparable properties for our valuation is mostly science. We try to stay close in distance to the home to be listed. The same subdivision or neighborhood is best. The saying that real estate is all about "location, location, location" is why we want to stay as close as possible to the home to be listed when gathering our comparables. This is also good practice for another reason, as the buyer's lender will hire an appraiser who will be doing the same thing.

Hopefully, we have a sufficient number of comparables without having to stray too far out of our area of choice. What are good comparables? The closer we can stay to the characteristics of the home to be listed the better. We consider things like:

  • Construction styling and architecture.
  • Home age.
  • Number of bedrooms, baths, garage spaces.
  • Size in square footage should not be too different.

Taking the items above into consideration, and staying inside of our desired area, we hope to find from three to ten comparable properties. If there are more, that's great, as we can narrow our selection by the criteria even more. Taking the final list, we are now ready to do our adjustments for feature differences.

Unless we were lucky enough to find several identical properties, we now must adjust values for the feature differences. In this process, we adjust the selling prices of our sold comparable properties by the estimated value of features that are different from our home to list.

Example: Our home to list has three bedrooms. One of our comparables is very similar, but has four bedrooms. We would subtract our estimate of the value of a bedroom from the sold price of the comparable to make it a more accurate comparison to the home we're listing. We do this for all the major feature differences between each comparable and our subject property.

If there are lot size differences, we do the same type of adjustment math for the difference in acreage. The purpose of this portion of our valuation procedure is to get all the homes on the list adjusted to sold prices that reflect homes with the same bedrooms, baths, garages, and other major features.

Another phase of the process that bridges the gap between Science and Art is our analysis of the market of currently listed comparable homes. The science is in the gathering of the listing data, and the adjustment of the numbers to get our comparables as closely aligned as possible. Now, let's move to some more subjective valuation factors.

The Art:

We've gathered a lot of data, and we've crunched a lot of numbers. Our sold comparables prices have been adjusted to make them more similar to our subject home. We've also done the same type of adjusting for the homes currently listed that would be considered competition.

Why do we do the current listings? Sold comparables reflect past history. Even though we've taken the most recent sales, they're still events in the past. There was an existing competitive market at the time of those sales that may not be similar to the current market's properties.

The motivations of the buyers of those previously sold homes may not have been the same in the current competitive market. An experienced sales person will look at the current market competition, and make adjustments to the valuations suggested by the Science portion of our procedure. If there is less comparable inventory now than when previous properties sold, then we may want to take our valuation up a bit. If there is more inventory, we might want to go the other way.

That's not the only Art to the process. An extensive knowledge and experience of real estate sales representative in a market will contribute to their ability to tweak the listing price for the best results. Knowing the Seller's motivations and time frame are a contributing variable. Knowledge of area seasonal buying trends, as well as development patterns are also part of the Art facet in our valuation process.

Rarely is anything of value also easy. This is an example. Taking the Science and the Art of real estate valuation into account, the real estate professional advises the listing client in order to arrive at the best listing price to sell the property in their desired time frame and for the best possible net price.

Though many believe the Internet has made this process easier, that's really not the case. It has released a great deal of information and pricing data to public scrutiny. However, just because data is published, it does not mean that it is accurate. There is also the diversity of sources for valuation data. Where you get it can change the results.

More than ever before, extensive knowledge and experience in a market is of great value. There is more data from more sources out there. The trick is to gather the best data, crunch the numbers with Science, and interpret them with the Art that comes from experience.

Kevin & Faye Kitzman

Sales Representatives

Remax Real Estate Centre

Direct : 519-577-0603



Faye Kitzman

Mortgage Agent

Mortgage Intelligence



Tuesday, 15 January 2013

Bank of Canada could raise rates half a per cent this year

Bank of Canada could raise rates half a per cent this year, says RBC outlook

An improvement in the U.S. economy this year would be a boon for Canada — and that could push the central bank to raise interest rates before the end of the year.
A global outlook from Royal Bank predicts that the Bank of Canada will boost rates by as much as half a percentage point.
Mark Chandler, head of fixed income and currency strategy at RBC Capital Markets, said Thursday in a conference call that the move would hinge on Canadian economic growth keeping its momentum, rather than slowing as it did in late 2012.
“The Bank of Canada should be the only major central bank to actually make the move to tighten this year,” he said.
“We’re looking for 50 basis points in aggregate tightening skewed toward late this year.”
Economists have been divided over whether the central bank will boost rates this year or in early 2014. Bank of Montreal deputy chief economist Doug Porter expects the BoC to keep interest rates on hold for the year, while a report from TD Bank targets the overnight rate to climb half a percentage point in the fourth quarter.
Signs of improvement in the domestic economy have materialized over the past few weeks, with the December jobs report showing Canada created 40,000 jobs for the month, all of it coming from prized full-time positions. The unemployment rate fell to its lowest in four years.
Royal Bank suggested that if the U.S. economy continues to pick up the pace, then demand will climb for some of Canada’s biggest exports into the latter half of 2013.
The industries that would benefit most include ones that produce materials for the recovering U.S. housing sector, as well as the automotive industry, capital spending, and industrial production.
Growth in the U.S. would also push commodity prices higher and keep the Canadian dollar elevated, Chandler said.
“We see Canada as a bit of a canary in the coal mine for developed fixed income markets, and that means we think it’ll be important to watch, even if you’re not directly involved in the Canadian market,” he added.

Source: The Canadian Press
Kevin & Faye Kitzman
Sales Representatives
Remax Real Estate Centre
Direct : 519-577-0603
Faye Kitzman
Mortgage Agent
Mortgage Intelligence

Thursday, 10 January 2013

7 Simple rules to get the most from your TFSA

7 simple rules to get the most from your TFSA
Follow a few simple rules and your TFSA savings will add up.
By Gordon Pape

So you still don’t fully understand Tax-Free Savings Accounts even though they’re been around for five years?
You’re not alone. Since TFSAs were launched in 2009, I’ve received hundreds of emails and letters from people who are confused about the intricacies of these investment plans. Some are included in the new edition of my book Tax-Free Savings Accounts: How TFSAs Can Make You Rich, which has just been published by Penguin Canada.
At first glance, TFSAs seem deceptively simple. You put some money into an account, hopefully make a profit, and eventually withdraw it all tax-free. But, as they say, the devil is in the details. That’s why tens of thousands of people have been advised by the Canada Revenue Agency that they inadvertently over-contributed to their plans — they just didn’t understand the rules.
To help you get the maximum benefit from your account and avoid running afoul of the CRA, I’ve put together a list of TFSA dos and don’ts based on my book. Here they are.
Don’t get stuck in the wrong plan . There are several different types of TFSAs. If you walk into a bank or credit union and ask to open an account, they will probably put you into a savings plan or one based on guaranteed investment certificates. With interest rates so low, your return from these will be negligible. If all you want is to set up an emergency fund, that’s fine. But if you are looking to maximize tax-free profits, you’ll want a plan that allows you to invest in mutual funds (available at most financial institutions) or the stock market (you’ll have to go to a broker).
One reason so many people ran into trouble with the CRA was that they opened the wrong type of plan for their goals. When they figured it out, they withdrew the money and moved it to a more appropriate account, not realizing that in doing so they were over-contributing. The result: penalty interest. So get it right the first time.
Do think through the TFSA/RRSP conundrum . This is the start of RRSP season. Since most people only have a limited amount to invest, deciding between a TFSA and an RRSP can be difficult. The RRSP has the advantage of immediate tax deductibility but you’ll be dinged in later years when you make a withdrawal. There’s no tax break for a TFSA but when it comes time to take some money out of the plan it’s all yours to keep.
There is no simple answer to this one but as a general rule if you expect your tax rate to be lower after you retire, the RRSP is the best choice. The TFSA is preferable for those who expect their income will be higher. Ironically, it’s also a much better choice for low-income people who expect to rely on the Guaranteed Income Supplement when they retire, as withdrawals are not counted as income, as withdrawals from an RRSP are.
Don’t use TFSAs for education savings . Generally, a registered education savings plan (RESP) is the best choice for putting money aside for a child’s or grandchild’s post-secondary education. The reason is the Canada Education Savings Grant, a federal government payment which is worth up to $500 a year to a maximum of $7,200 per child.
Do have a succession plan . No one wants to think about death when they’re opening a TFSA but you need to. In all provinces except Quebec, investors with a spouse or partner are allowed to designate a “successor holder.” If anything happens, that person automatically takes over the account — it does not have to go through the estate process.
To be clear, a successor holder can only be the spouse or common-law partner of the person who owns the TFSA. Anyone else named to inherit the plan’s assets, such as a child or sibling, is a beneficiary. You’ll be asked to complete the appropriate forms when you open the account.
Don’t open a lot of plans . Technically, there is no limit to the number of TFSAs you can own. But there is no advantage to multiple plans — you don’t get any more contribution room and it will be more difficult to keep track of your investments.
Do help your spouse/partner open a plan . Normally, you can’t give money to a spouse/partner to invest because of the CRA’s income attribution rules. TFSAs are an exception, however. If your loved one does not have any money to invest, you can provide it with no penalty. This effectively means that the contribution limit for a couple is doubled.
Note that there are no spousal TFSAs. Each person owns the plan in their own right.
Don’t over-contribute . The individual limit for 2013 is $5,500 plus any carry-forward room from previous years and any amounts withdrawn in the past that have not been replaced. To find out your personal limit, check your account at the CRA website.

Kevin & Faye Kitzman
Sales Representatives
Remax Real Estate Centre
Direct : 519-577-0603
Faye Kitzman
Mortgage Agent
Mortgage Intelligence

Tuesday, 8 January 2013

Protect your credit score

Protect your credit score.
When you apply for a mortgage, your lender checks your credit score to determine what kind of risk you are likely to be as a borrower. Your score can change from month to month, which is beneficial to you because it means you can improve your score with the right credit activities. Unfortunately, a low credit score can prevent you from getting the lowest mortgage rate, or from getting a mortgage at all. That’s why it’s so important to follow the basics for good credit score behavior, which include:
· Always paying your bills on time.
· If you need to carry a credit card or line of credit balance, try to always keep your accounts under 30% of your available credit limit.
· Before you cancel any credit cards, get advice.
· Don’t apply for credit you don’t need, including any store cards that give you the opportunity to save on your purchase that day!
Good credit is your passport to opportunities! So if you have any questions about your credit situation, please let me know.

-- SIncerely,
Kevin & Faye Kitzman
Sales Representatives
Remax Real Estate Centre
Direct : 519-577-0603
Faye Kitzman
Mortgage Agent
Mortgage Intelligence

Friday, 4 January 2013

Your inside track to the mortgage market

Your inside track to the mortgage market

For most people, their mortgage represents their largest and lowest-cost debt obligation. That’s why reliable mortgage information is so important.  As a professional Mortgage Consultant, I can provide the kind of timely and relevant information you need to make more informed decisions on a wide variety of topics, including:


• Purchases (first or next)

• Downpayment options

• Paying down your mortgage faster

• Mortgage renewal

• Refinancing debt to save

• Investing in property

• Renovation financing

• Equity take out

• Vacation/Second Home

I believe the right mortgage can build your wealth and save you thousands of dollars, and I look forward to providing you with ongoing information and advice, starting today! Look for further informational updates from me. In the meantime, if you ever have specific questions about mortgage financing, please let me know.
Kevin & Faye Kitzman
Sales Representatives
Remax Real Estate Centre
Direct : 519-577-0603
Faye Kitzman
Mortgage Agent
Mortgage Intelligence