In honour of fraud prevention month, TD Canada Trust released this quiz to help consumers identify their level of fraud savvy. Each right answer receives 2 points – the correct answers are located at the bottom of the quiz.
1. What does a criminal need to make a copy of your card and access your account?
a) The card -- my Personal Identification Number (PIN) is on the stripe
b) My PIN -- they can use a blank card
c) The card and my PIN together
2. A customer's PIN is located on the magnetic strip on their card
a) True
b) False
3. How often should you cover the key pad when you enter your PIN?
a) Always
b) Sometimes
c) Never
4. What is Phishing?
a) Looking over someone's shoulder at an ABM to learn their PIN
b) A scam done over the phone or via email to obtain personal and financial information
c) Rifling through the garbage to look for discarded receipts and statements
5. A salesperson asks you for your PIN, saying their new keypad doesn't stretch that far and they have to enter it themselves. You:
a) Give them your PIN and debit card
b) Decline to give them your PIN but continue your transaction and move around the counter to enter your PIN yourself
c) Leave and contact your financial institution
6. How often should you check your banking and credit card statements for discrepancies?
a) Always
b) Often
c) Never
7. You do your banking online, so when you receive your statement in the mail you should:
a) Throw it away without opening it
b) Read it and put it in the recycling
c) Read it and shred it
8. How secure should you be with your debit and credit cards?
a) Fairly secure - don't loan them to strangers but it's OK if family and friends borrow them
b) Don't sweat it. If someone steals them you will be reimbursed
c) Treat them like cash and know where they are at all times
9. You go to pay for lunch and your credit card is gone. What should you do?
a) Call your credit card company immediately to report it lost
b) Dine and dash
c) Drop by your bank branch a few days later to report it missing
10. What should you do if you receive an email from your financial institution asking for your banking information?
a) Enter the information
b) Delete it because your financial institution would never ask for your banking information via email
c) Contact the email sender to find out more
11. What should you do with expired identification and credit cards?
a) Throw them away
b) Save them because you like the way you look in the photo
c) Shred them
12. You sell something online to a stranger who sends you a check for too much and asks you to wire the difference. You should:
a) Do as they ask because you trust the selling site
b) Do as they ask because if the cheque's no good your bank will reimburse you
c) Cancel the transaction and rip up the cheque
The answers
Give yourself 2 points for every right answer: 1.c) 2.b) 3.a) 4.b) 5.c) 6.a) 7.c) 8.c) 9.a) 10.b) 11.c) 12.c)
Where you stand
If you scored 20-24: You run a tight ship - your information is pretty safe
• You have a place for everything and everything is in its place so you know almost instantly if something is missing or not right. Now, while you may not apply this strategy to every aspect of your life (we know about your junk drawer), you know that your debit and credit card is safest with you and you know how to keep them from getting into the wrong hands.
• Not only do you shield your PIN during the transaction but you take your transaction record and destroy it when you no longer need it. Remember to do the same with any expired identification or personal papers you no longer need.
• You probably don't have much to worry about since fraudsters tend to pick on easy targets. You are very careful and aware of how to protect yourself, so keep up the good behaviour.
If you scored 14-18: You know the basics, but there is more you can do to protect yourself
• Take extra precautions to protect your personal information. Maybe you don't share your PIN with anyone - but are you sure your PIN is a number that would be hard to guess? Avoid using your birthday or part of your phone number.
• Since e-mail isn't always secure, you know better than to send private information, like your credit card number, this way - but remember, not all websites are secure either.
• Make sure you are shopping on a secure website or look for merchants who use added security features, like Verified by Visa, before entering your credit card information.
• Also, shred your personal information. There is only one of you, let's keep it that way.
If you scored under 14: Be careful - you're sharing too much!
• Take the time to protect what is important - your identity, your money and yourself. Don't be so carefree with personal information. Never lend your cards to anyone, or give anyone your PIN. Even better, memorize your PIN so you don't need to write it down. And, never carry your PIN with your wallet.
• Unless you initiated the call, do not provide your credit card number over the phone.
• Though email is a convenient way to contact someone, your financial institution will never ask you to verify your banking information that way. And remember, that king from a far off land asking you to share your bank account information is not actually going to make you rich.
Thursday, March 25, 2010
Monday, March 22, 2010
Signs the market might (finally) be slowing?
The fact the Federal government’s new mortgage rules aren’t scheduled to kick in until April 19 hasn’t stopped housing markets across the country from showing signs of cooling.
As more lenders implement the rules early – and thus decrease affordability – and more homeowners put their houses on the market, it looks like the supply/demand curve might finally be balancing out.
Below are a few supporting numbers, as per the Canadian Real Estate Association’s numbers:
1.5% - the month-over-month drop in existing home sales from January to February, 2010. This follows a 3.8% decrease reported in January.
2.4% - The amount that new housing listings grew in that same period, marking the fifth straight month of increased housing supply.
5.2 months – The amount of housing inventory in February, well below the 8.8 months of February 2009, but on par with 2008 levels.
$335,655 – The average price of all homes sold in February – up 18.2% from a year earlier. Keep in mind, however, that the housing market was still in a slump for the first quarter of 2009.
"Time will tell how normal the market becomes, but I think there are pretty clear signs that some self-correcting mechanisms are starting to take over and lead to a calmer market, compared to what we saw in late 2009," said Douglas Porter, deputy chief economist at BMO.
As more lenders implement the rules early – and thus decrease affordability – and more homeowners put their houses on the market, it looks like the supply/demand curve might finally be balancing out.
Below are a few supporting numbers, as per the Canadian Real Estate Association’s numbers:
1.5% - the month-over-month drop in existing home sales from January to February, 2010. This follows a 3.8% decrease reported in January.
2.4% - The amount that new housing listings grew in that same period, marking the fifth straight month of increased housing supply.
5.2 months – The amount of housing inventory in February, well below the 8.8 months of February 2009, but on par with 2008 levels.
$335,655 – The average price of all homes sold in February – up 18.2% from a year earlier. Keep in mind, however, that the housing market was still in a slump for the first quarter of 2009.
"Time will tell how normal the market becomes, but I think there are pretty clear signs that some self-correcting mechanisms are starting to take over and lead to a calmer market, compared to what we saw in late 2009," said Douglas Porter, deputy chief economist at BMO.
Friday, March 19, 2010
The Pre Approved Mortgage Myth
Once upon a time in a country far far away anyone who was planning on buying house went to great intuitions of commerce to discuss the possibility with a wise and sage guardian of funds. Armed with their pre-approval people went out a looked for a house and when they found the perfect home they returned to the sage guardian and were given the funds to close the transaction. There was a thing called loyalty and relationships and once established these bonds were tough to beat.
Then things got better, much better. As people have become more savvy about borrowing and are exploring more options the pre-approval is one of those services that has diminished over the years. Many years ago when I was working in the bank we would handle a pre-approval as if it were a true mortgage application. We would subject it to the same scrutiny as any other type of loan and collect all our documentation. Once a client bought a house all they had to do was have the realtor send us the completed offer and the MLS listing. The next thing the client had to do was pick the paint and show up at the lawyers.
Most lenders are not pre-pared to invest that amount of time in pre approvals anymore because so few of them actually close. Clients shop around and often take the pre-approval and negotiate something better. Basically today’s pre-approvals often don’t even include a credit check. They are a brief conversation and calculations are done without clarification of income or down payment. Clients are given ball-park numbers and their rate is help for up to 4 months. Even actual commitments mean little but I will save that for another article.
If you are seeking a pre-approved mortgage and planning on using as an absolute guide to purchase then heads up! You need to make sure you have in depth conversation with someone with complete knowledge of the industry. If you find yourself shopping around for a person who finally tells you what you want to hear then you may have a problem at closing. The rules for mortgages are very black and white and especially insured mortgages really level the playing field. Make sure the person you talk to takes a good look at your income documentation and your source of down-payment. It should be clear in your mind what you have to bring to the table in order to make the process as smooth as possible. If friends tell you stories about running around at the last minute to gather information to close their mortgages then you need to stay clear of those recommendations.
Even after a full investigative interview your pre-approval is no guarantee. The lender has still not nailed down the true cost of your transaction. For example if you are pre-approved to buy a house at $450,000 you come back with a condo for the same amount I can almost guarantee you the condo fees are not factored into your ability to borrow . If you got a pre-approval that holds the rate till after April 19th the new rules will apply to your application once you find the home you want. Experience is the key to success. There are lot of great mortgage products on the market that make homeownership attractive. It’s your job to make sure you are sitting in front of someone who really knows and understands the rules.
Then things got better, much better. As people have become more savvy about borrowing and are exploring more options the pre-approval is one of those services that has diminished over the years. Many years ago when I was working in the bank we would handle a pre-approval as if it were a true mortgage application. We would subject it to the same scrutiny as any other type of loan and collect all our documentation. Once a client bought a house all they had to do was have the realtor send us the completed offer and the MLS listing. The next thing the client had to do was pick the paint and show up at the lawyers.
Most lenders are not pre-pared to invest that amount of time in pre approvals anymore because so few of them actually close. Clients shop around and often take the pre-approval and negotiate something better. Basically today’s pre-approvals often don’t even include a credit check. They are a brief conversation and calculations are done without clarification of income or down payment. Clients are given ball-park numbers and their rate is help for up to 4 months. Even actual commitments mean little but I will save that for another article.
If you are seeking a pre-approved mortgage and planning on using as an absolute guide to purchase then heads up! You need to make sure you have in depth conversation with someone with complete knowledge of the industry. If you find yourself shopping around for a person who finally tells you what you want to hear then you may have a problem at closing. The rules for mortgages are very black and white and especially insured mortgages really level the playing field. Make sure the person you talk to takes a good look at your income documentation and your source of down-payment. It should be clear in your mind what you have to bring to the table in order to make the process as smooth as possible. If friends tell you stories about running around at the last minute to gather information to close their mortgages then you need to stay clear of those recommendations.
Even after a full investigative interview your pre-approval is no guarantee. The lender has still not nailed down the true cost of your transaction. For example if you are pre-approved to buy a house at $450,000 you come back with a condo for the same amount I can almost guarantee you the condo fees are not factored into your ability to borrow . If you got a pre-approval that holds the rate till after April 19th the new rules will apply to your application once you find the home you want. Experience is the key to success. There are lot of great mortgage products on the market that make homeownership attractive. It’s your job to make sure you are sitting in front of someone who really knows and understands the rules.
Tuesday, March 16, 2010
Affordability is a personal thing
One of the most difficult things about buying a home - especially a first home - is the temptation to spend more than your income will comfortably allow.
It doesn't help that lenders tend to approve potential buyers on the premise that they don't have any expenses beyond those that revolve around their household - i.e., heating and electricity - and any outstanding debts. It also doesn't help that, the more money you spend, the higher your real estate agent's commission.
As a result, a homeowner's maximum prequalified loan amount tends to be much higher than what they can comfortably afford - and there are often a lot of forces working against them (sales pressure, bidding wars, emotions) encouraging them to spend the extra money.
In a recent episode of HGTV's Property Virgins, this scenario was played out in front of the rolling cameras. The show's host and real estate "guru", Sandra Rinomato, frequently encourages her first time buyers to purchase "as much house as they can afford" - and scoffs at those who cautiously don't want to spend their fully-approved amount.
In this particular episode, a young Toronto couple - both elementary school teachers - were approved for $450,000 with a $20,000 down payment. It's unlikely that either of these teachers were making more than $50,000 a year max, bringing their total income to somewhere around $100,000 before taxes. They were looking at homes between $350,000 and $400,000, but when they found a condo for $440,000, they - meaning the wife - fell in love with it. While the husband wasn't certain it could fit into their finances, a quick bat of his wife's eyelashes convinced him that they could, and they ended up going for it.
I have no idea when this particular episode was filmed (although it seems to be before the minimum down payment was raised to 5%), or what the interest rates were at the time, but even if they landed a mortgage at 4%, their monthly mortgage payment would be around $2,209.28 - plus condo fees ($220), property taxes ($200), and hydro ($100). Factor in an extra parking space ($150), that takes us to $2,879.28 a month - a fair chunk of the couple's after-tax income of approximately $6,029/month - and we haven't even addressed groceries, entertainment, take-out dinners, car payments, car insurance and all the other expenses that accompany living in an expensive city.
To leave yourself some breathing room, make sure you're well aware of your monthly spending habits before heading out to hunt for a home. Once you know where your money goes, work backwards and determine what monthly mortgage amount you can afford - and what that translates into in terms of a house price. Settling for a smaller home may not seem like a sacrifice when you can afford that extra vacation, or renovation, or fine dining experience that your house-poor neighbours can only dream about.
It doesn't help that lenders tend to approve potential buyers on the premise that they don't have any expenses beyond those that revolve around their household - i.e., heating and electricity - and any outstanding debts. It also doesn't help that, the more money you spend, the higher your real estate agent's commission.
As a result, a homeowner's maximum prequalified loan amount tends to be much higher than what they can comfortably afford - and there are often a lot of forces working against them (sales pressure, bidding wars, emotions) encouraging them to spend the extra money.
In a recent episode of HGTV's Property Virgins, this scenario was played out in front of the rolling cameras. The show's host and real estate "guru", Sandra Rinomato, frequently encourages her first time buyers to purchase "as much house as they can afford" - and scoffs at those who cautiously don't want to spend their fully-approved amount.
In this particular episode, a young Toronto couple - both elementary school teachers - were approved for $450,000 with a $20,000 down payment. It's unlikely that either of these teachers were making more than $50,000 a year max, bringing their total income to somewhere around $100,000 before taxes. They were looking at homes between $350,000 and $400,000, but when they found a condo for $440,000, they - meaning the wife - fell in love with it. While the husband wasn't certain it could fit into their finances, a quick bat of his wife's eyelashes convinced him that they could, and they ended up going for it.
I have no idea when this particular episode was filmed (although it seems to be before the minimum down payment was raised to 5%), or what the interest rates were at the time, but even if they landed a mortgage at 4%, their monthly mortgage payment would be around $2,209.28 - plus condo fees ($220), property taxes ($200), and hydro ($100). Factor in an extra parking space ($150), that takes us to $2,879.28 a month - a fair chunk of the couple's after-tax income of approximately $6,029/month - and we haven't even addressed groceries, entertainment, take-out dinners, car payments, car insurance and all the other expenses that accompany living in an expensive city.
To leave yourself some breathing room, make sure you're well aware of your monthly spending habits before heading out to hunt for a home. Once you know where your money goes, work backwards and determine what monthly mortgage amount you can afford - and what that translates into in terms of a house price. Settling for a smaller home may not seem like a sacrifice when you can afford that extra vacation, or renovation, or fine dining experience that your house-poor neighbours can only dream about.
Monday, March 15, 2010
Canadians Love Home Ownership
Canadians don't have any intention of curbing their home purchasing habits over the next two years, according to a recent study.
The 17th annual RBC Homeownership Study revealed that 10% of Canadians say they're 'very likely' to purchase a home in the next two years - an increase from 7% two years ago. Canadians aged 18-24 are leading the charge, with 15% saying they're 'very likely' to buy - an increase from 8% in 2009.
While 91% continue to see home ownership as a good investment, Canadians are still opting to take the cautious route. Forty-four percent are planning to take a fixed rate mortgage, although combination mortgages are increasing in popularity. Forty percent say they'll likely take out a mortgage with both a variable and fixed rated component, an increase from 32% in 2009.
For Canadians planning to take a fixed rate or combination mortgage, seven-in-10 intend to take a term of five years or longer. Sixteen per cent said they intend to take a variable rate mortgage, down from 20 per cent in 2009.
"Canadians seem to be opting for more caution this year and may be factoring in potential rate increases down the road," said Marcia Moffat, RBC's head of home equity financing. "Choosing a combination mortgage can take some of the guesswork out of making a decision between whether it is better to lock in to a longer-term or stay in a variable rate."
The 17th annual RBC Homeownership Study revealed that 10% of Canadians say they're 'very likely' to purchase a home in the next two years - an increase from 7% two years ago. Canadians aged 18-24 are leading the charge, with 15% saying they're 'very likely' to buy - an increase from 8% in 2009.
While 91% continue to see home ownership as a good investment, Canadians are still opting to take the cautious route. Forty-four percent are planning to take a fixed rate mortgage, although combination mortgages are increasing in popularity. Forty percent say they'll likely take out a mortgage with both a variable and fixed rated component, an increase from 32% in 2009.
For Canadians planning to take a fixed rate or combination mortgage, seven-in-10 intend to take a term of five years or longer. Sixteen per cent said they intend to take a variable rate mortgage, down from 20 per cent in 2009.
"Canadians seem to be opting for more caution this year and may be factoring in potential rate increases down the road," said Marcia Moffat, RBC's head of home equity financing. "Choosing a combination mortgage can take some of the guesswork out of making a decision between whether it is better to lock in to a longer-term or stay in a variable rate."
Thursday, March 11, 2010
Re-Establishing Your Credit - 3 Simple Steps to Getting Back on Track
Rebuilding your credit takes time, but with a little work and patience you will be back on track sooner than you think. The following steps will help you get to a clean start.
Step 1: Borrow Again
Believe it or not, the first step to re-establishing your credit is to borrow money! You need to show lenders that you are now in a position to make regular, consistent payments on a loan or credit card. But you’ve just been through some credit challenges – who will lend money to you? There are a number of loans and credit cards that are easily accessible no matter what your credit history:
RSP Loans – not only are these loans at a low interest rate, but they are also easier to obtain because the lender is holding onto the security – the RSP. In addition to helping you re-establish your credit, the RSP is a foundation for re-building your net worth.
Secured Credit Card – Lenders offer secure credit cards where you provide a deposit and the lender gives you a credit card for the same amount. For example, you place a deposit of $2,000, and the lender grants you a credit card for $2,000.
Finance companies such as Wells Fargo and HSBC Finance will grant credit to people who have had some credit challenges in the past. Many mortgage lenders will not consider these accounts as re-established credit, so you may be better off waiting until a traditional financial institution, such as a bank or credit union, will lend you the money you need.
Step 2: Make the Minimum Payments
When your minimum payment due is 10 or 12 dollars, it is easy to forget to make the payments and instead wait until the amount owing is more substantial. From a credit perspective, that’s a big mistake. The credit companies want you to make your minimum payments, no matter how small they are. If making monthly payments is difficult for you to do because you work hours vary or you travel extensively, consider having the minimum payments come directly out of your bank account each month.
Step 3: Be Patient
Re-establishing your credit takes time! In fact, most lenders want to see at least 2 years of re-established credit before they consider you to be a strong mortgage applicant.
No matter where you are in your credit repair cycle, Mortgages for Women has options for you. To learn more, contact us at 1-888-372-7367.
Step 1: Borrow Again
Believe it or not, the first step to re-establishing your credit is to borrow money! You need to show lenders that you are now in a position to make regular, consistent payments on a loan or credit card. But you’ve just been through some credit challenges – who will lend money to you? There are a number of loans and credit cards that are easily accessible no matter what your credit history:
RSP Loans – not only are these loans at a low interest rate, but they are also easier to obtain because the lender is holding onto the security – the RSP. In addition to helping you re-establish your credit, the RSP is a foundation for re-building your net worth.
Secured Credit Card – Lenders offer secure credit cards where you provide a deposit and the lender gives you a credit card for the same amount. For example, you place a deposit of $2,000, and the lender grants you a credit card for $2,000.
Finance companies such as Wells Fargo and HSBC Finance will grant credit to people who have had some credit challenges in the past. Many mortgage lenders will not consider these accounts as re-established credit, so you may be better off waiting until a traditional financial institution, such as a bank or credit union, will lend you the money you need.
Step 2: Make the Minimum Payments
When your minimum payment due is 10 or 12 dollars, it is easy to forget to make the payments and instead wait until the amount owing is more substantial. From a credit perspective, that’s a big mistake. The credit companies want you to make your minimum payments, no matter how small they are. If making monthly payments is difficult for you to do because you work hours vary or you travel extensively, consider having the minimum payments come directly out of your bank account each month.
Step 3: Be Patient
Re-establishing your credit takes time! In fact, most lenders want to see at least 2 years of re-established credit before they consider you to be a strong mortgage applicant.
No matter where you are in your credit repair cycle, Mortgages for Women has options for you. To learn more, contact us at 1-888-372-7367.
Wednesday, March 10, 2010
In the numbers: New mortgage rules
As you may have heard, the Federal government recently introduced three 'precautionary' new mortgage rules to help reign in some of Canada's hotter housing markets and better protect homeowners from artificially low interest rates.
The government's three changes include:
- Requiring lenders to qualify homeowners on the current five-year fixed rate, regardless of the type of mortgage they choose;
- Limiting the amount of equity people can withdraw when refinancing their homes (a maximum 90% of the value of their home, down from 95%);
- Requiring real estate investors to put down a minimum 20% down payment on non-owner occupied properties.
So what do these new rules mean to you? Below are a few numbers to consider:
$9,200 – that's the amount of additional annual income you'll need to qualify for a $337,000 home (the national average price) with 5% down, under the new rules.
33% - The percentage of homeowners who will actually be affected by the government's refinancing rules. Most people just aren't comfortable withdrawing 90% of their home's value.
15% - The amount of new mortgage originations that will likely be impacted by the government's down payment increase for investment properties. Judging by CAAMP's data – which estimates that approximately 240,000 mortgages were originated on new home purchases in 2009 – that could mean approximately 36,000 real estate investors will be affected in 2010.
The government's three changes include:
- Requiring lenders to qualify homeowners on the current five-year fixed rate, regardless of the type of mortgage they choose;
- Limiting the amount of equity people can withdraw when refinancing their homes (a maximum 90% of the value of their home, down from 95%);
- Requiring real estate investors to put down a minimum 20% down payment on non-owner occupied properties.
So what do these new rules mean to you? Below are a few numbers to consider:
$9,200 – that's the amount of additional annual income you'll need to qualify for a $337,000 home (the national average price) with 5% down, under the new rules.
33% - The percentage of homeowners who will actually be affected by the government's refinancing rules. Most people just aren't comfortable withdrawing 90% of their home's value.
15% - The amount of new mortgage originations that will likely be impacted by the government's down payment increase for investment properties. Judging by CAAMP's data – which estimates that approximately 240,000 mortgages were originated on new home purchases in 2009 – that could mean approximately 36,000 real estate investors will be affected in 2010.
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