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A 700 Credit Score Doesn’t = Good Credit
Theres more to a credit report than a score. You can have good income and a 700credit score(which is about average) and still not qualify for a mortgage. The reason is that lenders generally look for one key factor: repayment history. Suppose, for example, that you have a 710 credit score but only one credit account. Worse yet, that one account is a credit card that youve had for only two months. Before that, youve had either no credit or bad credit (most likely, any bad credit would be from a few years ago, given your score). In this case, your 710 score may not get the job done. Lenders often want to see a minimum of 1-2 years of satisfactory payment history and at least two trade lines (loans or revolving credit accounts). A trade line can consist of a major credit card with a $1,500+ limit (a rough rule of thumb), a revolving credit line, a reported lease, or an instalment loan (like a vehicle or investment loan). So, if you have no credit and you hope to apply for a mortgage, start building credit pronto. Get a credit card (even if its secured), a small instalment loan, a Futureshop card, whatever. And dontevermake a late payment. Many lenders require squeaky clean repayment history for at least 1-2 years. Of course, there are lots of exceptions to the aboveincluding cases where a co-signor or alternative credit can make up for traditional repayment history. (As noted in CMHCsNewcomerprogram, Alternative credit can include things like proof of satisfactory rent payments and utility payments for 12 months). Keep in mind, however, that alternative credit is an exception and not a rule. Speak with a mortgage professional if you have questions about your own unique circumstances.
Vancouver the main driver of the Composite in December
Vancouver the main driver of the Composite in December says Teranet and National Bank of Canada Without Vancouver, the Composite index would have declined for a fourth month in a row. The strength of Vancouver’s index is consistent with continued tight home resale market conditions. Toronto’s index declined for a fifth consecutive month, but the unsmoothed index (see note on methodology on next page) rose for a second month in a row (middle chart). Unless the unsmoothed index relapses in January, the sequence of declines in the smoothed index should then be interrupted. However this improvement is likely to prove temporary, as it might have resulted from buyers rushing to avoid the new bylaws on qualification for an uninsured mortgage (implemented in January 2018). This view is supported by the increase in Toronto home sales in November and December compared to previous months (bottom chart). Therefore, a resumption of the downward price trend early this year cannot be excluded. Please click on the link below to access the full report: 201712 TNB monthly commentary
Bank of Canada increases overnight rate target to 1 1/4 per cent
The Bank of Canada today increased its target for the overnight rate to 1 1/4 per cent. The Bank Rate is correspondingly 1 1/2 per cent and the deposit rate is 1 per cent. Recent data have been strong, inflation is close to target, and the economy is operating roughly at capacity. However, uncertainty surrounding the future of the North American Free Trade Agreement (NAFTA) is clouding the economic outlook. The global economy continues to strengthen, with growth expected to average 3 1/2 per cent over the projection horizon. Growth in advanced economies is projected to be stronger than in the Banks October Monetary Policy Report(MPR). In particular, there are signs of increasing momentum in the US economy, which will be boosted further by recent tax changes. Global commodity prices are higher, although the benefits to Canada are being diluted by wider spreads between benchmark world and Canadian oil prices. In Canada, real GDP growth is expected to slow to 2.2 per cent in 2018 and 1.6 per cent in 2019, following an estimated 3.0 per cent in 2017. Growth is expected to remain above potential through the first quarter of 2018 and then slow to a rate close to potential for the rest of the projection horizon.