22 Mar


Mortgage Tips

Posted by: Nicolas Parato

Your credit history is an important component of the mortgage application process. It provides the lender with a snapshot of how well you service your debt and uses many different factors to determine an overall score. Below are three tips for building a healthy credit.

1. A Healthy Credit Balance

Always reaching your credit limit can become dangerous if you are not in the position to pay down the debt immediately. Going as high as 50% of the available credit limit is more than ok. However, constantly reaching or exceeding your limit without paying it down tells other lenders that you are potentially abusing your available credit and/or are unable to pay down your debts. In addition to this, If you cannot pay it off quickly, you run the risk of exceeding your limit with interest charges.

Instead, a solution to building a healthy credit is to diversify your debt load by having more than one card. Diversifying your debt load and making minimum payments demonstrates that you are able to service more than one debt obligation and decreases your debt utilization which positively contributes to the overall status of your credit score. With this in mind, it is highly recommended that you avoid spending beyond your means and only spend what you currently have.

2. Making Minimum Payments

Missing minimum payments on your credit card(s) can severely harm your credit score over time. It tells the lender that you are unable to service your current debt load and makes you more susceptible to higher interest rates because you are considered to be a higher risk. Most people do not realize this until they are looking to be approved for a larger loan such as a mortgage.

To avoid missing them, we recommend automating your minimum payments through your bank. Most lenders offer a feature to transfer funds from your account on a set date each month to pay a bill. You can set this up at your local branch or online. If you have a set amount that you put on your card each month, you can calculate your minimum payment (or more) and automate it through your bank. You can then tackle your debt when you choose while building your credit.

3. Creating a Payment Plan

If you are trying to pay down additional and heavier debt obligations, such as a PLC (Personal Line of Credit) or maxed credit cards, creating a prepayment plan for yourself would be a great option. Organize your debts by outlining what you owe and making sure payments are up to date. You can then tackle debts that have higher interest rates and require your immediate attention.

Another option can also be to consolidate other debts with your mortgage. With consolidation, you are adding your additional debt to your mortgage freeing up the additional available credit. The prepayment privileges outlined in your mortgage agreement will offer the ability to make additional payments on the entire mortgage which now contains your additional debt. Moreover, the interest rate on a mortgage (secured debt) is lower than unsecured debt such as credit cards are personal lines of credit. This can make a significant difference in how much money you are contributing to actually paying down your principal debt.

If you have any further questions or concerns regarding a mortgage for your home or the contents of this article, feel free to contact me by phone or email. I would be more than happy to assist you!

9 Mar



Posted by: Nicolas Parato

What you need to know before you renew your mortgage could save you thousands of dollars. Is your mortgage on your home or other properties maturing in 2018?

Typically you will receive your mortgage renewal notice from your current lender 3-4 months in advance of the renewal date. Sometimes you may receive an offer for early renewal. Either way, always reach out to your Dominion Lending Centres mortgage broker to find out your options and what you need to know before your renew your mortgage.

With the new mortgage rules in effect in October/November 2016 and subsequent changes January 1st 2018 it is more important than ever to know your options before you sign a renewal.

Did you know…?

  • If your current mortgage is funded before October 2016, regardless if you were a high ratio borrower or conventional borrower, the old rules for qualifying still apply
  • If you want to renew your mortgage at best rates you can transfer that mortgage to another lender without qualifying under the new rules
  • If you have any fees for transferring the mortgage they may be covered
  • Lenders are currently offering high renewal rates as they know 65%+ of borrowers will simply sign without doing any homework
  • Lenders are currently offering lower rates only after clients decline their first offer. Doesn’t seem fair does it?

Mortgage brokers have access to lots of great renewal programs from the banks, mortgage companies and credit unions.

Be informed before your mortgage renewal. Consult with an independent mortgage broker to review your financing needs for all of your properties and to set a plan well in advance of any mortgage renewal. If you are looking to make any large purchases such as investments, real estate, an automobile— know your options and the impact of these purchases on your financial situation

6 Oct



Posted by: Nicolas Parato

While the headline net jobs gain was a disappointing 10,000–well below the average monthly increase in the past year–the underlying data in this morning’s StatsCanada release were quite robust. The jobless rate remained unchanged at 6.2 per cent as the acceleration in wage gains suggests that the economy is close to full employment. Average hourly pay gains hit 2.2 per cent year-over-year, the fastest pace since April 2016, mostly reflecting a long-awaited acceleration in wages in the past few months. The Bank of Canada has cited sluggish wage growth as evidence of slack in the economy. In a reversal of the pattern in August, the rise in full-time jobs was dominant, up 112,000 offsetting a loss of 102,000 part-time jobs.

Canada’s labour market has generated more jobs this year since emerging from the last recession in 2009. Employment growth and rising incomes are fueling a consumption binge that has made the country’s economy the fasted in the G7. That growth, however, is slated to slow in the current quarter as exports have declined for three consecutive months and housing activity has moved off its peak, especially in the Greater Golden Horseshoe around Toronto.

Faster wage growth, which should eventually feed through to higher prices, supports the Bank of Canada’s view that inflation will return to its two per cent target over the next year. After a more dovish speech by Governor Poloz last week trimmed the odds of another rate hike this year, today’s report has led some commentators to suggest another increase before yearend is likely. Much will depend on the pace of overall economic activity, which is slowing. Today’s jobs report is consistent with our view that growth is tailing off to the 2.0%-to-2.5% range, well below the booming 4.5 per cent pace posted in Q2.



The unemployment rate at 6.2 per cent is the lowest in decades except for the period just before the financial crisis in 2008-09 when the economy was running full out.

According to StatsCanada, Ontario was the only province with a notable employment gain for the second consecutive month. There were employment declines in Manitoba and Prince Edward Island. Most of the job gains were in the public sector where educational services led the way, offsetting the losses in August. As well, more people worked in wholesale and retail trade in September, while employment fell in information, culture and recreation. Construction jobs were flat, and real estate related jobs edged down a bit.


Some Other Details In The Canadian Report

• Hours worked are up 2.4 per cent from a year earlier, the most significant annual increase since June 2012
• Total employment is up by about 320,000 over the past 12 months, driven by 289,000 new full-time jobs
• Youth unemployment fell to 10.3 per cent, the lowest on record, as their participation rate dropped. That reflected an increase in the full-time school attendance rate to the highest since 2011

Hurricanes Hit U.S. Payrolls

The number of employees on U.S. payrolls dropped in September for the first time since 2010. Nonfarm payrolls fell 33,000 while the unemployment rate plummeted two ticks to 4.2 per cent–a 16-year low–and wage gains accelerated. This seeming inconsistency is the result of the separate surveys used to determine each of these numbers. As well, hurricanes Harvey and Irma prevented 1.47 million people from going to work, the most since January 1996. Hourly workers are typically not paid unless they show up for work, regardless of reason.

The U.S. Labour Department suggests that hurricanes had a net effect of reducing the employment numbers in September, while there was “no discernible effect” on the national unemployment rate, which at 4.2 per cent is the lowest since February 2001. The U-6, or underemployment rate, fell to 8.3 per cent from 8.6 per cent; this measure includes those who are involuntarily working less than full-time and people who want a job but aren’t actively looking.

Very tight labour markets boosted average hourly earnings by 0.5 per cent month-over-month taking the year-over-year gain to 2.9 per cent. Some of this increase probably reflects the lower-paid workers that couldn’t make it to work because of the weather. It will be several months before the weather-related effects wash out.

There is nothing in this report that changes my view that the Fed will hike interest rates one more time before the year is out.


Chief Economist, Dominion Lending Centres
Sherry is an award-winning authority on finance and economics with over 30 years of bringing economic insights and clarity to Canadians.