Secured Credit Cards Can Lower Your Mortgage Interest Rates & Fees!

Here is one of the dozens of questions I receive daily:

Question: My wife and I wish to purchase a house in Canada. We are experiencing a problem getting a mortgage; I am a citizen and she is a permanent resident, we have an eleven year old daughter.

We have been in Canada for 3 months and I have been working for 3 weeks, as I have been resident overseas for 20 years I have no credit history here. I am a full time permanent, hourly paid employee at $11.00 per hour. My wife works voluntarily and is not paid.

The housing market in Yorkton is out of control due to the boom in Saskatchewan and we wish to get our own house as our apartment rental is now $550.00 per month. We have no debts bar utilities, our car is paid for and I can afford a down payment of $15,000.

I have my overseas credit report but my rating is low, probably because we worked on cash and had no credit cards, our house was also paid for.

We do not have a credit card except for a "prepaid " MasterCard.

Today we looked at a house at $59,900 which though small would suit us.

What I need to know is there any point in submitting an offer?

Cornerstone Credit Union says I have to work for six months, Western Canadian says I have to work for one year, I have applied with TMG on May 17th, 2008 who want bank references from overseas.

I tried applying online with Scotia bank on Sunday June 15th but they have not acknowledged my application as of today. Your help would be valued.

Answer: Most lenders require 1 year on the job as you've already found out and this includes BNS.

Only private lenders who deal with "sub prime" clients may be able to help you BUT I recommend you wait until you are at least 1 year on the job to save on interest rate, fees and house price.

Housing market is slowing down. Supply of good homes will flood the market and prices across Canada will decline.

Purchase your new home in 2009 and 2010 but make sure you re-establish your credit first with secured credit cards.

You’ll be glad you did!

Joe Malek, AMP