Good credit can make it easier to do things such as rent an apartment or negotiate a lower rate on a loan.  Bad credit on the other hand can hold you back from accomplishing your dreams.  If you have bad credit, you don’t have to pay someone to help you improve it.  Follow these 5 easy tips to have better credit and be closer to achieving your dreams.

1. Check Your Credit Report

You may access your free credit report and score from one of the top two credit reporting bureaus, TransUnion (https://www.transunion.ca/) and Equifax (https://www.equifax.ca/personal/).  According to Equifax, good credit is anything 660 or higher.  The higher the credit score the better your credit rating.

Review your credit report and make sure it is accurate.  Report any inaccuracies. The credit bureau will have a process to report disputes. See if you have unpaid balances or if anything has gone to collections.  Pay these as they could negatively impact your credit score.

2. Pay Your Bills On Time

Paying your bills on time, on or before the due date, is important to maintaining good credit. Ideally, you want to pay the full balance, however, if you cannot pay in full, the minimum balance should be paid. If you are paying online or through the mail, you should give enough time for the mail to reach the creditor or the online transaction to be processed.  Set up auto-pay with the lender or through your bank for at least the minimum amount to avoid late payment. 

3. Don’t Close Old Accounts

One thing that could impact your credit score is the length of time your account has been open.  The longer the average age of your credit accounts the better.  Keeping those old accounts open, even if they are paid off and not being used, could help build up your credit score and maintain a credit history.

4. Keep Your Credit Utilization Rate Low

Your credit utilization rate is the amount you owe compared to the limit. This is reported as best practice to help maintain or improve your credit. It is recommended that you keep this rate at 30%.  For example, if your credit card limit is $1,000 you should maintain a balance of at most $300 by the due date.  You may do this by spending less or paying more often to maintain the recommended 30% rate.

5. Don’t Open Too Many Credit Accounts At The Same Time

If your credit is low, applying for too many new credit accounts, that require the lender to request your credit report, could negatively impact your credit score. To help improve your credit score, minimize how often you apply for new credit.  New credit accounts could also affect the age of your credit history.

Conclusion

Having good credit can make things easier when renting or buying a home.  Make sure you know your credit information.  Follow these 5 tips to maintain or to help improve your credit score and report.  If your credit is not good right now, remember it may not improve overnight but with persistence and consistency, you will get there.  Be patient.  Don’t give up. 

 Start your journey with confidence. Contact me today.

Buying your first home is an exciting milestone but it can also be overwhelming. As a first-time home buyer, you may have many questions and concerns. Here are 10 essential tips to help you on your journey to home ownership.

1. Strengthen Your Credit

Your credit score is between 300 and 900 which tells lenders how likely you are to pay your bills on time.  The higher the score the better your credit rating.  Lenders look at this number and your credit history to determine how risky it would be to lend you money.  They may use this information to figure out how much to lend you and how much interest to charge.

If you need a mortgage to buy your first home, you should know your credit score before meeting with a mortgage lender. If your score is low, there are ways to improve it so you have a better chance of getting the mortgage and you may be able to negotiate a more favourable interest rate.

Learn More About Credit Score and Report

5 Ways To Improve Your Credit Score

2. Get a Mortgage Pre-Approval

Getting a mortgage is a vital step in the home-buying process.  A mortgage pre-approval letter tells sellers that you are serious about buying and can afford the property.  It also tells you how much you can afford so you can focus on homes within your price range.  You will need information such as credit score and report, proof of income, and assets during the pre-approval process.

3. Use a Real Estate Agent

Working with a real estate agent will help make the buying process easier.  A real estate agent can answer questions and direct you step by step in your journey.  Your agent should know about the area you want to live in and have experience with first-time home buyers.

4. Prepare For Closing Costs

In addition to saving up for your downpayment, you also need to estimate and save for the closing costs. Closing costs are usually a significant amount and should be considered before putting in an offer on a home. The closing costs you have depend on where you buy the home and the type of home you buy. In Ontario, it is typically estimated at 1.5 to 4% of the price of the home.  If your purchase price is $850,000, for example, you should expect to save at least $19,124 to $38,250 for the closing costs.  Closing costs could include things such as Land Transfer Tax, Lawyer Fees, Home Inspection, Utility Setup, and Home Owner’s Insurance. Be prepared and make sure to consider closing costs in your budget for buying your first home.

5. Choose Your Neighbourhood

Your dream home awaits in the perfect spot. Start by envisioning your ideal lifestyle. Now, map out essentials: workplaces, schools, shops, hospitals. Don't forget green spaces and transit options. As you narrow down neighbourhoods, consider long-term value. Remember, your first home is both a haven and an investment. Choose wisely for present joy and future returns.

6. Understand The Offer Process

Buying a home starts with finding your ideal property. Next, determine a fair offer price with your agent's guidance. Include desired extras like appliances, and window coverings in your offer. Submit the offer through your agent, who will negotiate on your behalf. Don’t be discouraged if your initial offer is not accepted. Instead, be open to further discussions. Remember, successful deals benefit both buyer and seller. Stay flexible and persistent throughout negotiations to secure your dream home. 

7. Find Out About Incentives

Do you need financial assistance to buy your first home? Incentives for first-time buyers offer solutions. Downpayment assistance eases initial costs. Post-purchase aid provides ongoing support. Tax credits reduce your overall burden. Grants offer free money towards your home. Low-interest loans make monthly payments manageable. Government programs, non-profits, and lenders provide these options. Research thoroughly to find incentives matching your needs. Smart use of available assistance can make your homeownership dream a reality.  Here are some examples:

• First-Time Home Buyer Tax Credit

• Land Transfer Tax Rebate

• RRSP Home Buyer’s Plan

• First Home Savings Account

• Tax-Free Savings Account

• HST/GST New Home Rebate

8. Make A Wish List

Let's make a list of features you would love to have in your new home! Think about what you really need, like the number of bedrooms and bathrooms, as well as the layout and any accessibility features.  Identify those that are must-haves and those that are nice to have.  This list will help you focus on what matters most and make your home-buying journey easier and more enjoyable.

9. Get A Home Inspection

A professional home inspection is crucial when buying a house. For a few hundred dollars, it could help uncover potential issues such as electrical, basement, roofing, and plumbing problems. This investment could save you thousands in unexpected repairs. If significant issues are identified, you have options: request fixes before taking possession or negotiate a price reduction to cover repair costs. Don't skip this vital step in the home-buying process.

10. Plan For The Future

Imagine your perfect home five years from now. A nursery for new arrivals? A quiet home office? Now picture your ideal neighborhood. Trendy cafes? Top schools nearby? By visualizing your future, you'll choose your first home wisely. Consider potential family growth, career changes, and community development. This foresight helps you select a property that evolves with your needs. A home that fits tomorrow's lifestyle is a smart investment today. Think ahead and find a place you'll love for years to come.

Conclusion

Buying your first home is an exciting milestone but it can also be daunting. Follow these 10 essential tips and you will be better prepared on your journey to homeownership.

I am dedicated to working with you every step of the way, helping you find the dream home that meets your needs and is within your budget.  Happy House Hunting!

Start your journey with confidence. Contact me today.

Buying a home can be challenging and expensive but it can also be very exciting and rewarding.  The Canadian government offers many programs to help you move from renter to buyer. If you have considered buying your first home but are not sure how to start or where to go for help, this page shares resources that may help first-time home buyers move from renting to buying. Before we get started, let's answer a couple of questions.  How do you know if you qualify as a first-time home buyer? What type of home qualifies under most of these programs?

Are You A First-Time Home Buyer in Ontario?

You are considered a first-time home buyer if you or your current spouse or common-law partner have not owned or jointly owned a property as your principal place of residence in the past 4 years.  For example, if you want to withdraw funds from your RRSP on July 31, 2025, you must not have owned a home from January 1, 2021, to June 30, 2025.

What Types of Home Can You Buy to Help Qualify for First-Time Home Buyers Programs?

To qualify for some of these programs, the home you purchase must be one of the following:

• Single-family homes

• Semi-detached homes

• Townhouses

• Mobile homes

• Apartments in: 

  • Duplexes

  • Triplexes

  • Fourplexes 

• Apartment buildings 

• Condominium units

• A share of ownership in a co-operative housing corporation

Here are 5 Canadian Government programs that can provide financial support for first-time home buyers and help them move from renter to buyer.

1. RRSP Home Buyers’ Plan

The RRSP Home Buyers’ Plan is mainly for first-time home buyers.  It helps by allowing first-time home buyers to borrow money from their RRSP (Registered Retirement Savings Plan) to buy or build a qualified home.  In 2024, the withdrawal limit is increased from $35,000 to $60,000.  This means that you can withdraw up to $60,000 without a tax penalty.

Read More About RRSP Home Buyers’ Plan

2. First Home Savings Account (FHSA)

First Home Savings Account is a first-time home buyer’s plan that allows you to save up for your first home tax-free, up to a limit.  You can claim the amount you contribute to your FHSA as a tax deduction in the following tax year.  For example, if you save $10,000 in your FHSA in 2024 up to December 31, 2024, you can claim that amount on your 2024 taxes in 2025.

You are eligible for FHSA if you are a Canadian between 18 and 71 years old at the end of the contribution year and you qualify as a first-time home buyer.  You must meet all the criteria to open a FHSA account.  You may open a FHSA account with your financial institution and may be able to include investments in your account.  Check with your financial institution to see what you can hold in the account.

Read More About First Home Savings Account

3. Land Transfer Tax Rebate

When you buy a home, some provinces, such as Ontario, charge a land transfer tax as a % of the price of the property. If you live in Toronto and the surrounding areas, you pay city land transfer tax as well. To help first-time home buyers, some provinces and cities give you a rebate on the land transfer tax you pay when buying the house. Depending on the price of the house, some first-time home buyers could get a full rebate on the land transfer tax.  There are some eligibility criteria to qualify, and you must apply within 18 months of purchase.

Click here to Read More About Land Transfer Tax Rebate

4. GST/HST Rebate on New Homes

If you buy a new construction home, you may be eligible for a rebate on some of the taxes charged on newly built homes.  Check with your builder and real estate agent to see if you qualify.

Read More About GST/HST Rebates on New Homes

5. Home Buyers Tax Credit

You may be able to claim a tax credit on your income tax return for a qualified home if you are a first-time buyer.  

Read More About Home Buyers Tax Credit

For more information about these programs and how you can move from being a renter to a home buyer, call Patricia Faith Martin at 905-274-3434 or visit Contact Me.