March 2007 Volume 3, Number 3
In This Issue
· Market Update
·
Guest Article
Things You Should Know Concerning Credit
·
In Closing
Real Estate Links
Stef Lukas, our Realtor
Richard Anderson, our Mortgage Broker
The Real Estate Investment Network
An Online Listing Service
Another Online Listing Service
The Multiple Listing Service
Contact Us
Bill Biko
President/Investor Relations
403-870-4663
In This Issue
· Market Update
·
Guest Article
Things You Should Know Concerning Credit
·
Real Estate Links
Stef Lukas, our Realtor
Richard Anderson, our Mortgage Broker
The Real Estate Investment Network
An Online Listing Service
Another Online Listing Service
The Multiple Listing Service
Contact Us
Bill Biko
President/Investor Relations
403-870-4663
Market Update
How things change in a year, I just received the latest statistics for February 2007 and, as always, there is some great information hidden in the numbers. A remarkable 31.43% of single family homes sold in February sold between $400,000 and $499,999. That's almost one third of all the properties sold. Compare that segment to February 2006 where that price range accounted for only 13.75% of the market.
In the condo market, 19.78% of all condos were sold at a price between $300,000 and $349,999 in February 2007 versus only 4.1% in this category in February 2006. The largest segment of condos sold in February 2006 was in the $175,000 to $199,000 range, at only 17.89%.
So we are all aware that prices have increased substantially in the last year, this just confirms the obvious. What gets overlooked is there is no slowdown in buying from last year up to now. Even with the huge increases in value, people are still able to not only continue buying properties, but at an increased pace. There was a 9.66% increase in sales this February versus last February and a 27.25% increase from January 2007's sales.
We haven't even reached the busy buying season yet, so what happens then? Let's walk through what I see happening. Values increase further in March, April and May; therefore any properties that are currently held as long-term hold properties continue to increase in value, and rents once again increase as new investors costs rise to buy and hold properties.
Overall, this puts any investment properties you or I currently have in stronger positions both for cash flow and equity, and helps give us all a warm fuzzy feeling at the beginning of each month as we make our rent cheque deposits.
Guest Article - Things You Should Know Concerning Credit - Trevor Adams B.Mgt
Equifax and Trans Union
There are 2 organizations in Canada responsible for collecting your credit information and determining your credit rating; Equifax and Trans Union.
Generally credit grantors pull your credit score from Equifax and banks
tend to pull your Trans Union bureau as well to verify consistency.
It is recommended that you check your credit bureau every quarter
to ensure accuracy; it is amazing that a creditor's mistake will only
affect you and in most cases negatively.
To contact or request a credit bureau from each, visit the following links: www.equifax.com and www.transunion.ca
What's A Good Credit Score?
Credit Scores range from 300 to 900, 300 being the worst and 900 the best. A credit score of 580- is poor, 580 to 620 is okay, 620 to 680 good and 680+ excellent. Sometimes if you have not yet established credit or have not had any credit reporting for a long period of time you can get an N, I, R or X.
Why Is My Credit Score So Important?
Creditors determine the amount they will allow you and the fees and rates they will charge you based on your past repayment performance and credit score. Your credit score will either cost or save you a ton of money!
Which Creditors Report to Equifax and Trans Union?
Not all creditors report to Equifax and Trans Union. Utility, Cable
and Phone companies generally do not report therefore if you are running
tight on funds, it is recommended you pay these bills last. The only
way these companies will show up on your credit bureau is if you completely
stop paying them and they enlist the services of a collections agency;
it is the collections company who will report that you have defaulted
on your agreement with those companies. Revolving accounts such
as Credit Cards, Lines of Credit, Auto Leases, Auto Loans, Student Loans,
Note Loans etc. do report, most monthly some quarterly so it is important
to know when they will report to ensure you are in good standing with
those creditors the day they report to Equifax and Trans Union.
Okay, So What Do I Need To Do Establish and Maintain A Good Credit Rating?
- Creditors want to see that you have a minimum of 1 but better yet 2 credit lines reporting for more than a year each. This gives you a track record of at least 12 months but of course longer is better.
- Always pay on time! Even if it is the minimum payment. Late payments seriously depress your score and of course if you consistently have late payments or let them go over month you can expect to dip into the poor credit score area.
- Never go over your credit limit! This is a big no-no. In order to get the best credit score keep your balance to limit ratios at or below 85%. So if you have a $1,000 credit limit, the balance should be $850 at the most, lower being even better. Keeping balances higher than the 85% ratio is considered misuse.
- Limit the amount of credit cards you have to 1 or 2. It is best to have 2 credit cards with higher limits than several with low limits because it takes time to earn higher limits and creditors recognize this. More than 2 credit cards is considered excessive use.
- Only apply for credit as needed. The more creditors pull your credit bureau, the more inquiries show up on your bureau and the lender will consider you as credit hungry. As a consumer it is in your best interest to shop around but make sure your credit bureau is not being pulled each time as every inquiry depreciates your score a few points each time. For example: when shopping for a mortgage, use a broker and one broker only as he or she will pull your bureau once and each lender the broker submits too will use that one bureau as opposed to pulling another one.
- Whatever you do, try to avoid ever getting any collections, into OPD or Bankruptcy. It will stay on your bureau for 7 years and it will generally take 2 or 3 years before a creditor will even look at you or before you will ever get back to decent rates without huge fees again. Same goes for foreclosures ...; I don't know what to say other than they are bad news.
- Other Red Flags to be aware of include: multiple addresses (lenders get curious as to why you may be moving so often), employment (make sure this is consistent with what you put on any credit application as it shows current employer, former and secondary employment). Just ensure you are consistent when applying for credit.
But My Mom and Dad Told Me Never Get Credit as It Is Just Debt!
Listen! Gone are the days of paying everything with cash and debit cards
and welcome to the world of credit. The fact is
the banks, cell phone companies and all other companies offering credit
have no idea who you are or whether your promise to make payments on time
are sincere; they can only go off of your past repayment history with
other creditors. If you wait until you need credit in order to buy
that much wanted vehicle or need that important loan for whatever reason,
you will find out just how difficult it is to a) obtain it and b) get
the best rates. Debt is what you make it.
In an ideal world you should pay for everything with your credit card,
collect air miles or whatever points are offered and then go home and
pay it off from your savings account immediately; this is very rare but
possible. If you cannot manage your credit and know you
will buy things you cannot afford, then I would suggest staying away from
credit cards because although establishing credit will save you thousands
of dollars in your lifetime, mismanagement will also cost you thousands
or dollars as well.
Okay, I Had a Bad Go Round the First Time, How Do I Turn My Credit Around?
The nice thing is that everything can be fixed in time. Change
your credit management habits and follow the steps outlined above and
you will put yourself in a better situation sooner than you think.
Conclusion
The above information was put together by popular demand and is intended
to help open doors to opportunities you never thought or don't
know existed. This is the information we should be taught
in High School and I am frustrated that it is not offered.
The fact is, I can get anyone a mortgage but you must understand that
you get what you have prepared for. If you want the best
rates, you need to earn them ... if you are looking to get a
mortgage come see me and I will design a plan for now and the future to
ensure you are not making the banks any more money than they should and
that you are getting the best rates possible.
Please feel free to contact me anytime should you have any questions or have any information you think I could add (403) 999-6559.
Trevor Adams B.Mgt
Licensed Mortgage Associate
403-999-6559 (Cell)
1-866-800-7228 (Fax)
adams.t@telus.net
Want to Learn How toMake Your Mortgage Tax Deductible? I Can Show You How to Use the Equity in Your Home to Invest and How You Can Cut Your Monthly Credit Expenses in 1/2 ... or More!!! For a Free Consultation, Call Me! (403) 999-6559
In Closing
Disneyland was a great treat for our family, and if you too have small children, I highly recommend you make the journey. Just make sure you have very comfortable shoes.
I hope you enjoyed the guest article this month, if you like this feature please let me know, or if you are interested in providing an article I would love to hear from you. Also, thanks to everyone who signed up for the separate Investment Opportunity emails.
We are just approaching the spring buying season, so we should see quite a bit of activity in the market. With the great weather Calgary is seeing right now, we may even see the rush start earlier than normal.
Talk to you soon,
Bill &
Karen Biko
Kat
Legal
Disclaimer
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