Ksenia Pakhomova Mortgage and Real Estate Services

PERMITTED SOURCES OF DOWN PAYMENT Did you know that there is a list of permitted sources of mortgage down payment in Canada? If you are planning to apply for a mortgage in order to purchase a home save this post! First of all, try to plan the down payment in advance and make sure its source is among the listed below:... Savings: last 90 days of bank account statements including name and account number, history of each account that held the money and explanation of large deposits RRSP/TFSA/Investment: last 90 days of account statements including name and account number, the RRSP amounts are to be at least 90 days old to avoid taxes Gift the signed gift letter, copy of actual cheque and deposit proof Inheritance legal documentation and deposit proof Sale of property a copy of the signed purchase and sale agreement Sale of asset (e.g. car) bill of sale, copy of old registration, deposit proof Existing equity in different property via HELOC: title and mortgage details Borrowed money (via Line of Credit or Personal Loan): loan or LOC details Contact me If you have any questions about permitted sources of down payment.

IMPROVING YOUR CREDIT SCORE Despite the current level of your credit score you should remember that it can always be changed. For better or worse it is up to you. But if you plan to buy a home you should definitely take into account the following good credit practices:... Pay bills on time: remember to make at least the minimum payment without delay. Control your credit card balance: try to use less than 35% of your available credit, if used more pay it off right away. Be careful with new credit card accounts: do not apply for new cards frequently to avoid looking irresponsible to creditors. The longer you have a credit account open and in use, the better it is for your score. It's better to have a mix of different types of credit (credit card, line of credit, car loan) than have only one type of credit product, such as a credit card. Check information online: do not wait for the bills to come in the mail, check payments and cards online. Pay off delinquent bills: it won’t remove missed payments from your report but surely will make you look better to creditors. Correct inaccuracies: all incorrect or incomplete information in the report has to be changed, it is up to you to alert credit bureaus about inaccuracies. Credit scores are incredibly important as they: represent an interpretation of your creditworthiness help creditors decide what kind of risk you are and what interest rate you will be offered. Pay careful attention to your credit history so you know where you stand.

HOW MUCH YOUR HOME IS WORTH? When coming up with an idea of selling property, you may already have the desired price on your mind. However, in reality, it can actually be worth more or less. So, before making any plans for the imaginary sum, contact a trusted realtor and get a home market evaluation.... Why is it crucial? Evaluation helps sellers to set proper prices and helps buyers to purchase. When there is no home market evaluation, the buying or selling deal gets more like a guessing game unprofessional and unpleasant for both sides. Which factors affect home market evaluation? A realtor can provide an estimated home value based on the recent market data and thorough database search of the real estate sold or listed nearby. The following data is usually taken into account: Active listings are useful in case of direct competition but do not show real market value until they sell. Pending listings are used to find out the market trend, but cannot be really compared because they do not show the real sold price until being closed. Sold listings are always used for market value determination and can be compared. Canceled and expired listings give an overview of homes that probably did not sell due to overpricing. CONTACT ME FOR A FREE HOME EVALUATION

WHAT IS THE RISK OF LENDING TO YOU? In my blog I already mentioned the credit score, which is now of the most important factors in determining what house you can buy. Do you know your score? If you are in the market for a new home, you need to evaluate how it affects you.... To make things simple mortgage companies determine the risk of lending to you by credit or "FICO" score system. Looking at the credit report, lenders see your debts, reliability with bill payments and any bankruptcies for the last several years. The "credit score" takes all of this information and boils it down to a number between 300 and 900. The higher the number, the less of a credit risk you are seen to be. As with all new things, there is controversy over credit scores. To be eligible for some types of loans, you require a minimum credit score without any exceptions. Also, credit scores fluctuate over time. In fact, the mere act of applying for credit can lower your credit score. If you have any questions, ask them in comments and check in my next post on how to make sure you have the highest credit score possible.

TIP 1: HOME BUYERS’ PLAN Where can you get money for the down payment? Of course the best option is to minimize debts and save it in advance. It is always better if the payment comes from your own funds. But what if it’s not an option in your case? Then you could use some help. For example, the Home Buyers’ Plan (HBP).... What is it? HBP allows you to withdraw a tax-free amount from a personal Registered Retirement Savings Plan (RRSP). This money can be used for buying or building a home. In total you can get up to $35,000. Within 15 years the withdrawn amount needs to be repaid. What needs to be taken into account before signing up for the HBP? Make sure that you will be able to repay the amount. Calculate in thoroughly together with all the other payments. Evaluate the remaining retirement savings and the way withdrawing sum affects them. What possible risks could there be? Not being able to repay the withdrawn amount will cost you a lot in income tax. Despite eventual full repayment you still risk losing out on any growth while the amount is withdrawn.