presents

CREDIT 101WHAT ANYONE IN THE REAL ESTATE / INVESTMENT ARENA NEEDS TO KNOW ABOUT CREDIT!

A little about Geoff Lee…

√ Co founder and Director of the Imani Orphan Care Foundation● www.imaniorphancare.com

√ Over 15 years of real estate experience & Real Estate Investor

√ Member of…● Better Business Bureau● Chamber of Commerce● Mortgage Brokers Association of British

Columbia● Canadian Association of Accredited Mortgage

Professionals

√ Mortgage educator/key note speaker  for… ● Wealthy Investment Network ● Business Network International

√ Regularly sourced for mortgage insights by the … ● Vancouver Sun ● Mortgage Broker News

√ Ranked amongst the top 3% mortgage brokers in Canada by CMP magazine

√ Finalist in 2013 CMP Canadian Mortgage Awards for Best Customer Service from an independent office

What is a credit score anyway?

It indicates a person’s credit worthiness (poor, fair, good, excellent, etc.) in comparison to others.

A credit score tells the Lender how much of a risk you are, which also affects how much you’ll pay for your mortage.

Scores range from 300 to 900 (the perfect score)

The average Canadian adult has a credit score of 700.

Only 11% of Canadians rank above 800!

…and its virtually unheard of to see a score near 900…

All you really need is 680 – 800 to get the best mortgage rates.

Even if you have 600, you likely can still get a decent deal if you can prove income and haven’t had any delinquencies in the last year.

What is a “B” client?

1 OUT OF 5 CANADIANS ARE IN THIS BOAT…

A “B” CLIENT IS SOMEONE THAT HAS ISSUES WITH THEIR CREDIT AND THE BANKS HAVE NOT LIKED WHAT THEY HAVE SEEN!

GOOD NEWS! THERE ARE LENDERS THAT ARE WILLING TO GIVE TO THE CREDIT CHALLENGED! ESPECIALLY IF YOU HAVE A BIG DOWN PAYMENT.

Different mortgages require different scores!

Mortgages for the self-employed or for rental properties require higher scores.

The table to the right shows the approximate effect of different scores on mortgage rates.

Credit Score

Interest Rate

700+ The best rate

680-699 +0.00 - 0.20%

650-679 +0.30%

620-649 +0.40%

600-619 +0.50%

580-599 +1.50%

540-579 +2.00%

500-539 +3.50%

How is the credit score calculated?

A. Payment History 35%

i. How many payments are over 30 days late?

ii. How many collection agencies are after the client?

iii. Are there any judgements or bankruptcies?

How is the credit score calculated?

A. Current Debts - 30%

i. How much do you currently owe?

ii. How many creditors do you currently owe money to?

iii. How much could you owe if you used all your available credit?

How is the credit score calculated?

A. Age of Accounts – 15%

i. The longer your accounts have been opened, the better!

ii. You need 3 accounts with a limit of $2000 over 1 year old… and at the minimum 2.

How is the credit score calculated?

A. Types of Credit – 10%

i. Bank loans, credit cards and revolving credit accounts all impact you differently.

How is the credit score calculated?

A. Credit Enquiries – 10%

i. How many times has your credit been pulled in the last 12 months?

ii. Mortgage Brokers only pull credit once… FOR MULTIPLE LENDERS!

What does a bad credit report look like?

TOO MANY CREDIT CHECKS

CREDIT BALANCES OVER 30% OF LIMIT

OVER 30 DAYS OUTSTANDING ON PAYMENTS OF CREDIT ACCOUNTS.

What does a good credit report look like?

CLEANCLEANCLEAN

So, how do I fix my credit?

1. Make payments on time. Top Credit Killer is when payments are made over 30 days late. BIG NO – NO!!!

2. Pay down credit cards to a maximum of 30% of the credit limit. Another Top Credit Killer is a MAXED OUT CREDIT CARD!

3. Applying for too much credit in a short period of time is also a Top Credit Killer.

Finally, know your credit score and manage it!

Over 70 – 80 % of Canadians have mistakes on their credit report. Tackle every mistake you find. It will make for a better credit score!

Get in touch with us….

www.geoffleemortgage.comTwitter: @geoffleecaLinked In: http://ca.linkedin.com/in/geoffleemortgage/Email: Geoff@geoffleemortgage.comPhone: 1.778.552.3489

Thanks so much for attending the GLM Mortgage Group workshop – CREDIT 101.

If you have any questions please call me at 778.552.3489 or email me at geoff@geoffleemortgage.com.

“We specialize at getting you the fastest “YES” at the SHARPEST RATE… GUARANTEED!!!”

- Geoff Lee