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DOMINION LENDING CENTRES OUR HOUSE WINTER 2018 39 ISTOCK TOOLBOX Character This trait is determined by: » Whether you habitually pay your bills on time; » Whether you have any delinquent accounts; » Your use of available credit. Using all or most of your available credit is not a good thing. You are better o€ to increase your credit limit than to use more than 70 per cent of your limit each month. If you need to increase your score faster, use less than 30 per cent of your credit limit. If you need to use more, pay o€ your credit cards early so you do not go above 30 per cent of your credit limit. » Your total outstanding debt. Capacity This is your ability to pay back the loan. Capacity factors in your cash flow versus debt, as well as your employment history. How long have you been with your current employer? If you are self-employed, for how long? Capacity is not what you think you can a€ord; it is what the lender thinks you can a€ord based of the debt service ratio. The Four Cs YOUR CREDIT RATING How lenders and credit agencies determine the interest rate you pay— or whether you'll even get a mortgage at all By KEVIN BAY I t is a great feeling buying your first home, but for most of us the first step is preparing to get a mortgage. That means demonstrating your credit-worthiness, captured in a metric known as a credit rating. Your credit rating and cash flow are based on a minimum two-year credit history. As mortgage rules continue to change, the credit rating is becoming even more important as a higher credit rating could mean a lower interest rate and save you thousands of dollars over the life of your mortgage. Several attributes are factored into your credit score, but they boil down to what we might call the four Cs. KEVIN BAY is an accredited mortgage professional and part of DLC Producers West Financial, based in Langley, B.C. Capital How much have you saved? How much do you have for a down payment and where does it come from? Collateral Lenders consider the value of the property and other assets. They want to see a positive net worth. If you have a negative net worth you may not be able to get a mortgage. Weakness in one of these areas could prevent you from getting a mortgage. Contact your Dominion Lending Centres mortgage specialist for a free review of where you stand. MORTGAGE