DoF May Soon Mandate Higher Down Payments + MORE Dec 1st

A credit card can be a powerful financial tool when used responsibly, and can also help build your credit score. But what if you don’t have sufficient credit yet, or have damaged it in the past, and can’t qualify for a credit card?
Fortunately, there are options available for those who can’t get a credit card on their own.
Co-Signed Credit Cards
Similar to a mortgage, some lenders will let an applicant use a co-signer in order to qualify for the card. The co-signer, who typically has good credit, is equally responsible for any debt owed to the card, and their credit score is also on the hook. Co-signed credit cards are slightly different than supplementary cards, which just allow you to access the credit of another cardholder (usually a parent and teen), and can be a good way for those with limited credit (typically students and newcomers to Canada) or damaged credit to get credit cards.
However, co-signed credit cards can be a deterrent for those trying to build their own credit scores; because the loan is based on their co-signer’s credit, they aren’t actually improving their own score through use of the card…

There is a risk of a collapse in housing prices if oil falls to $35 US a barrel and remains there for five years, triggering unemployment of 12.5 per cent in Canada, according to Canada Mortgage and Housing Corporation.

Canada Mortgage and Housing Corporation (CMHC) has released their 3rd quarter results, and they indicate Canadian home buyers are doing a better job of managing their mortgage debt. The Crown corporation, which offers mortgage loan insurance and securitization guarantee programs, finds the new average buyer credit score and debt service ratio are on an uptick.
Improving Credit Scores for Canadian Home Buyers
CMHC found the average credit score for transactional homeowner loans in the third quarter was 747. This is an excellent score and shows that homeowners are doing a good job of managing their debts. Maintaining a good credit score is important if you plan to borrow money for a major purchase like a home, and generally the better the score, the better your mortgage rate. According to Equifax and TransUnion, Canada’s two credit monitoring agencies, a score of 600 to 749 is considered good, while a credit score of 750 and above is great.
Buyers Better Able to Handle Mortgage Debt
CMHC also found the average gross debt service (GDS) ratio for transactional homeowner loans in the third quarter was 25…

By the end of January, the Department of Finance may recommend raising the minimum down payment to 10%. That’s what I’m hearing from a high level lender source connected with the DoF, who declined to be identified. Policy-makers are reportedly considering a graduated scale based on either the home value or mortgage amount—something like this: $0 to $500,000 requires at least 5% down $501,000 to $700,000 requires at least 7% down Over $700,000 requires 10% down These numbers are purely speculative, but such a methodology would do two things: Insulate first-time buyers (who typically have mortgages in the high $200k READ MORE

Q: We co-signed on a line of credit for our children so they could complete their post-secondary education. Now we’d like to know if there’s a way to remove our names from the loan, even if it’s not paid off?
—Allison Walsh, New Dundee, Ont.
A: Co-signing a line of credit or loan is a big responsibility. You are 100% responsible for repaying the debt and it can affect your own ability to borrow. Of course, there can be good reasons to co-sign, especially when it’s for your kids. But removing your name isn’t easy and you’ll need to talk to your bank about your specific case. Generally speaking, however, in order to remove your name from the loan your child would need to qualify for a new line of credit or loan based on his or her own income and credit history. Provided they are approved, you can transfer the balance over and close the existing account. If they don’t qualify, a new co-signer would have to be found. You didn’t mention why you wanted to remove your name. But if there happen to be withdrawals from the line of credit that you aren’t comfortable with, you may be able to suspend the loan, allowing deposits to be made but no withdrawals…