In the dynamic landscape of Canadian real estate, aspiring homeowners, particularly first-time buyers, often face challenges in navigating the path to homeownership. However, with the availability of various first-time home buyer programs across Canada, the dream of owning a home becomes more attainable for many. In this blog post, we’ll explore the different first-time home buyer programs available in Canada, shedding light on eligibility criteria, benefits, and how they can pave the way to your dream home.

1. Home Buyers’ Plan (HBP):

What is it?
The Home Buyers’ Plan (HBP) is a federal program that allows first-time home buyers to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) to purchase or build a qualifying home.

Eligibility:

• You can only use your own RRSPs for an HBP withdrawal.
• The maximum withdrawal is $35,000 per eligible person.
• The house you’re buying or building must be in Canada.
• You must be a first-time home buyer (or not have been a homeowner within the previous four years).
• You must be a resident of Canada.
• The property must become your principal residence before October 1 of the year following the RRSP withdrawal.  (Be careful if your property is under construction, because delays might prevent you from meeting the deadline.)
• The money you withdraw under the HBP must have been contributed to your RRSP at least 90 days before withdrawal.
• You can’t use the HBP for a second home, like a cottage. But the property you’re buying doesn’t need to be a single-family home. You can also take advantage of the HBP to buy a unit in a triplex or a high-rise.
• You have to repay the money you withdraw within 15 years. (The 15-year period begins in the second calendar year after the withdrawal.)

2. First-Time Home Buyer Incentive (FTHBI):

What is it?
Introduced by the Canadian government, the First-Time Home Buyer Incentive (FTHBI) aims to make homeownership more affordable by providing shared equity mortgages with the government.

The incentive amounts to 5% of the property’s value for an existing home and 5% or 10% for a new home. The incentive is an interest-free loan. It must be reimbursed when the property is sold or within 25 years of purchase. The amount repaid will be based on the value of the property at that time.

3. Land Transfer Tax Rebates:

What are they?
Many provinces and territories in Canada offer land transfer tax rebates or exemptions for first-time home buyers. This rebate can significantly reduce the upfront costs associated with purchasing a home.

Eligibility:
Eligibility criteria for land transfer tax rebates vary by province or territory. Generally, first-time buyers are defined as individuals who have never owned a home or have not owned one in the last several years.

Beginning January 1, 2017 for Ontario residents, no land transfer tax would be payable by qualifying first‑time purchasers on the first $368,000 of the value of the consideration for eligible homes. First‑time purchasers of homes greater than $368,000 would receive a maximum refund of $4,000.

4. First-Time Home Buyer Grants and Programs:

What are they?
Several municipalities, provinces, and non-profit organizations offer grants, incentives, and programs specifically designed to assist first-time home buyers with down payments, closing costs, and homeownership education.

Eligibility:
Eligibility criteria for these programs vary widely and may include factors such as income level, residency status, and property location. It’s essential to research and inquire about available programs in your area.

5. The Tax-Free Home Savings Account (FHSA)

The FHSA is a new account that allows you to save for your first home. It also allows you to make tax-deductible contributions of up to $8,000 per year, up to a lifetime maximum of $40,000. Your contribution room starts to accumulate as soon as you open your first account. You can carry forward your unused FHSA contribution room, up to a maximum of $8,000, to use in the following year.

Eligibility:

To open a tax-free First Home Savings Account (FHSA), you must meet the following eligibility criteria:

• You must be a resident of Canada.
• You must be between 18 and 71 years old*
• You and your spouse must not own a home in Canada. This means you must be a first-time home buyer.

Conclusion:

Navigating the realm of first-time home buyer programs in Canada can be daunting, but with the right knowledge and guidance, aspiring homeowners can unlock a world of opportunities to achieve their homeownership dreams. From utilizing the Home Buyers’ Plan and First-Time Home Buyer Incentive to exploring land transfer tax rebates and local grants, there are various avenues to make homeownership more accessible and affordable.

At DLC Forest City Funding, we specialize in helping first-time home buyers navigate the complexities of the Canadian real estate market and leverage available programs to their advantage. Contact us today to learn more about how you can take advantage of first-time home buyer programs and embark on your journey to homeownership with confidence.

Cheers,

Morgan McAlpine

So, you are looking to purchase a second property! Congratulations! This is a great opportunity for you to expand your financial portfolio and ensure stability for the future. However, before you launch into this purchase there are a few things you should know, depending on which type of second property you are looking to purchase.

SECOND PROPERTY WITH INTENTION TO RENT

Buying a property for the purpose of renting it out to someone else comes with different qualifying criteria and mortgage product options than traditional home purchases. Before you look at purchasing a rental property, there are a few things to consider:

1. The minimum down payment required is 20% of the purchase price, and the funds must come from your own savings; you cannot use a gift from someone else.
2. Only a portion of the rental income can be used to qualify and determine how much you can afford to borrow. Some lenders will only allow you to use 50% of the income added to yours, while other lenders may allow up to 80% of the rental income and subtract your expenses.
3. Interest rates usually have a premium when the mortgage is for a rental property versus a mortgage for a home someone intends on living in. The premium can be anywhere from 0.10% to 0.20% on a regular 5-year fixed rate.

Rental income from the property can be used to debt service the mortgage application, but do bear in mind that some lenders will have a minimum liquid net worth requirement outside of the property. Also, if you do eventually want to sell this property it will be subject to capital gains tax. Your accountant will be able to help you with that aspect if you do decide to sell in the future.

VACATION PROPERTY

While vacation properties are not always the perfect investment, they are popular options for people who want to get away from it all and build memories in! If you’re motivated to head down that road, buying a vacation property is essentially like purchasing a second home.

If you are considering buying a unit within a hotel as a vacation spot (known as “fractional ownership”), it is important to note that if there is any mention of using your vacation home to provide rental income it will be treated like an investment property.

SECONDARY PROPERTY

Most people are trained to stay out of debt and don’t tend to consider using the equity in their home to buy an investment property, but they haven’t realized the art of leveraging. If you’re using equity from your primary residence to buy a secondary property, keep in mind that the interest you’re using is tax deductible. Consider that you’re buying an appreciating asset, and if you put a real estate portfolio and a stock portfolio side-by-side, they don’t compare.

WHO IS A GOOD CANDIDATE?

You might be surprised to learn that you don’t need to make six figures to get in the game. Essentially, you just have to be someone who wants to be a little smarter with their down payment. Before taking on a secondary property remember that the minimum down payment is 5% of the purchase price – unless you are intending to rent, in which case it is 20% down.

When it comes to purchasing a secondary property, whether for investment or rental or vacation, it can be a great opportunity! As your mortgage broker I can work with to find the best solution for your unique needs.

AIR BNB ON YOUR MIND?

More and More Canadians are hopping on the short-term rental train as Air BnB’s popularity has sky-rocketed over the last few years. It’s not a bad way to earn extra money, but don’t forget there are a few things to consider:

• Check strata/city bylaws
• Contact your insurance provider to get correct coverage
• Talk to your mortgage broker to see if a short-term income property can affect your approval
• Consider tax implications, and talk to an accountant.

The more services you provide as a host, the greater the chance that your rental operation will be considered a business.

If you have questions regarding purchasing a second home or rental property, feel free to reach out!

Cheers,

Morgan McAlpine

Work-from-home policies and changing lifestyle needs have sent many homebuyers venturing into Canada’s cottage countries this past year. This move has certainly contributed to the significant increase in home prices.

As the transition from an urban or suburban home to a recreational one can involve many new elements of ownership, research shows that some important property considerations are being forgotten about by first-time buyers.

According to real estate agent survey insights published this week by Royal LePage, 33.1 percent of respondents said that checking the quality of a property’s cell phone reception and internet connection is the number-one consideration first-time recreational property purchasers tend to take for granted or forget about.

Between June 15th and June 18th, the online Royal LePage First-time Recreational Purchase Survey polled 277 Royal LePage real estate advisors from across the country to learn more about the homebuying experience in recreational markets. The survey ranked the top 10 factors that recreational property buyers tend to gloss over.

About a third of agents said that ensuring the quality of cell phone reception and internet both in and around the property was a top factor that first-time recreational property purchasers frequently overlooked.

“Most people buy a cottage because they want a place to escape from their busy lives; somewhere peaceful and serene. While privacy is important, you want to make sure you’re not in an area so remote that you can’t make a phone call in an emergency,” said Pauline Aunger, a real estate broker with Royal LePage Advantage Real Estate in Smiths Falls, Ontario, in the report.

“Today more than ever, the ability to stay connected online is so important; be it for remote work, connecting with family and friends, or catching up on the latest Netflix series,” she added.

Understanding that owning a cottage on the water does not always mean waterfront ownership ranked in second place on the list at 15.7 percent. This was closely followed by ignoring considerations around water sources that are used in the area, according to 12.9 percent of those surveyed. The report noted that inquiring about whether your recreational home’s water comes from a well or a lake is important to know when it comes to usability, quality and treatment expenses.

“In a major city or a suburban neighbourhood, we don’t think about things like how to maintain a property in winter, or whether the water from the tap is drinkable,” said Aunger in the report. “When searching for a recreational property, these things can make a huge difference.”

In fourth place, 8.5 percent of respondents noted that knowledge of rules around long- and short-term rentals, such as Airbnb, was another vital consideration that is often missed. The 10-item list also ranked considerations around home seasonality (8.1 percent), sewage systems (7.3 percent), municipal regulations (5.6 percent), garage removal (4.8 percent), motorized vehicle regulations (2.4 percent) and snow removal (1.6 percent).

With the COVID-19 pandemic forcing many Canadians to stay put and rework their vacation plans, the Royal LePage report explained that recreational markets country-wide have seen “a significant spike in activity.” This resulted in a 16 percent year-over-year increase in the aggregate price of a recreational home in 2020. Royal LePage said that it is forecasting a 15 percent annual increase for Canadian recreational property prices in 2021.

Congratulations! You’ve got the keys to your new home and the unpacking of boxes has started! How excited are you?!

Whether you’ve have moved into a new build or re-sale property, there are a few things you can do as soon as you take possession in order to make it your own. Invest a weekend or two into warming up a featureless space or refreshing someone else’s old homestead.

Here are 10 things you can do to really own your new space and turn it into home sweet home:

1. Change The Locks: Secure your home by changing the locks as soon as you take possession. Even DIY beginners can change a deadbolt lock. A replacement deadbolt set can be installed in place of the current lock with just a screwdriver— no drilling required. Another option is to rekey the lock. Purchase a rekeying set from the same manufacturer as the existing door lock, and reset it for a new key

2. Consider a Professional Deep Cleaning: Hiring a professional cleaner to deep-clean and detail your home before you move your possessions in can make your new home feel that much more YOU! It will be easier without any furniture to work around, allowing them to access to every nook and cranny. Yes, you’ll have to clean again after moving day, but the heavy lifting will have already been done!

3. Clean Out the Vents: Years of dust, pet dander and detritus collect in the hidden workings of any home. One of the most effective ways to refresh a new home is to get right into the guts of it! Have your ducts, furnace and air conditioning unit professionally cleaned and be sure to change the filters as required to maintain that clean, fresh air.

4. Apply a Coat of Paint: Painting provides the most bang for your home-improvement buck! Whether the walls of your home are dingy or you’re simply not feeling the magic of beige, it only takes a few hours to repaint your space with a colour that makes you feel at home.

5. Freshen Up Your Floors: Much like worn-out walls, old floors can really put a damper on that new-home buzz. If your hardwood has seen better days, you can consider hiring professionals to re-do it or tackle the project yourself by renting a floor sander and varnishing over a weekend. For carpet, a deep steam clean can do wonders! For laminate, you can get that extra shine with a special laminate floor cleaner. Although if any of your floor coverings are lifting or have holes in them, you may want to replace it. You can further personalize your new space by adding floor runners or area rugs!

6. Neutralize Odors: Any re-sale home can benefit from a deep-clean refresh to eliminate any lingering odors from previous tenants. While some of the above steps will dramatically reduce any lingering smells, stubborn aromas require spot treatments such as:

• Putting dishes of activated charcoal (also known as activated carbon) in a musty, damp basement. These can be found at aquarium stores.
• Running a dehumidifier during the spring and summer.
• Placing a sock filled with dry coffee grounds or baking soda in closets, refrigerators or freezers to absorb stale odors.
• Pouring white vinegar down a stinky drain.

7. Enjoy the View! Dirty windows and screens can make rooms feel dark and dingy. A thorough cleaning will have your windows shining, and your indoors will feel brighter and fresher too. If your home came with the previous owner’s window coverings, be sure to clean or launder them; it’ll remove allergens as well as reduce any lingering odours. Or consider replacements with colours and patterns more suited to your style!

8. Lighten Up! A well-lit home is immediately warmer and more inviting than its darker counterparts. If your rooms feel dim, replace the existing bulbs with bright, energy-saving LED or CFL bulbs for more light and cost-savings! Dated lighting fixtures can also foil your redecorating efforts, so consider replacing them with something more your style.

9. Time for a Switch: Replacing your switch plates only requires a screwdriver but you would be surprised how much swapping out old lighting switch plates can refresh your space. With a little DIY expertise, screwdrivers, pliers and a voltage tester, you can install energy saving dimmer switches instead.

10. Display Your Art: Once you have deep-cleaned your new home and organized it to your heart’s content, it is time to dress up your walls with your favourite artwork and family photos! Get your kids’ kindergarten masterpieces onto the fridge and deck out your mantel with family photos.

Moving into a new home is one of the best times to make your space perfect for you! With a clean slate and empty floor space, now is the time to include all the things that make your house a home – to you! Unpack your belongings and personal items and add a splash of colour with throw pillows or rugs to brighten things up.

A down payment is one of the most essential aspects of every mortgage application and new home purchase. In Canada, home purchases require a minimum payment from your own funds that is put towards the purchase. This is your down payment and is considered your stake in the deal.

Many home buyers understand that a certain amount of money down will be required on a home. However, most don’t realize the ins-and-outs of down payments, such as where the funds are allowed to come from and ensuring a proper paper trail.

Here are a few things to keep in mind while preparing your down payment and working towards your perfect home!

SOURCES OF DOWN PAYMENT

Most home buyers are aware that they will require a certain amount of money for a down payment. What many do not realize, is that lenders are required to verify the source of the funds. This allows them to ensure that they are coming from an acceptable source. Sources that further contribute to indebtedness are less-likely to be considered (such as line of credit or credit card). Instead, the best and most traditional options for your down payment are:

SAVINGS ACCOUNT

The first and most traditional method is your savings account, where you have been pinching your hard-earned pennies to save up for this day!

If you are utilizing your personal savings for a down payment, note that lenders will require three months of full bank statements. This includes name, account number, transactions and balance history. For any large deposits made in that time (sale of a car, work bonus, etc.), explanations and supporting documents will be required.

GIFT FROM FAMILY MEMBER

If you are fortunate enough to receive help from the Bank of Mom and Dad for your down payment, there are certain requirements:

• A signed gift letter from the immediate family member contributing the fund
• Proof of the transfer into your bank account. This can be a bank statement documenting the money being moved from the donor’s account and into yours. The statements must include names, account numbers and the full transaction history during the time period in question.
• Important note: If money is being received from immediate family overseas, most lenders will require copies of the wire transfer. In addition, they may ask for account history.

RRSP WITHDRAWAL

Another option for down payment is the use of Registered Retirement Savings Plan (RRSP), but only if you are a first-time buyer. This is part of the Home Buyers’ Plan (HBP), which allows first-time buyers to borrow up to $35,000 from their RRSP’s (tax-free!) -as long as the money is repaid within 15 years. Please note: The minimum repayment is 15 equal instalments paid once per year.

HOW MUCH DOWN?

When it comes to putting money down on your new home, you need to consider the minimum down payment required as well as additional fees.

The minimum amount required in Canada is 5% for the first $500,000, with 10% down on any amount beyond that threshold. For example, on a $600,000 house you would need to put $35,000 down at minimum ($25,000 on the first $500,000 and $10,000 for the additional $100,000 purchase price).

Keep in mind, if your down payment is less than 20% of the price of your home, you will be required to purchase mortgage loan insurance in case of default. These premiums range from 0.6% to 4.50% of the total amount of your mortgage. Using the example above, this would mean $3,600 to $27,000 in mortgage insurance premiums.

If you are able to put 20% down on your new home (which is the recommended amount), you would be looking at an investment of $120,000 down with no mortgage insurance premiums required.

ADDITIONAL COSTS AND FEES

One component of the purchase process that homeowners often forget about, are the closing costs. These are typically 1.5% up to 4% of the purchase price. In order to get financing, you are required to show that you have enough to cover these costs, which include legal fees.

When you have collected the funds for your down payment and closing costs, you must ensure those funds remain in your bank account once you’ve provided confirmation. They should only leave your account when they are provided to your lawyer to complete the purchase. This is because lenders will often request updated statements closer to the closing of the sale, to ensure nothing has changed. If money has been moved around, or if there are new large deposits or withdrawals, they will all need to be confirmed and could affect approval.

The last thing that anyone wants when purchasing a property is added stress or for something to go wrong late in the process. Consider contacting me or another Mortgage Professional today to help guide you through the process! Make sure you are upfront about your down payment amount, and where it is coming from. This will help a mortgage broker determine whether or not it is suitable, and allow them to find the best lender and mortgage product for you!

The term “rate hold” may be something you are familiar with if you have worked with me in the past. If not, it is a term that all prospective buyers should know!

A rate hold is offered by the majority of lenders to clients who are purchasing a new home and need a mortgage. The purpose of the rate hold is to secure the interest rate on your mortgage application for a certain time period. Often, these holds range from 90-120 days. Bear in mind, these are typically not provided for anyone refinancing their mortgage or looking to transfer it from one lender to another. Only those looking to purchase a home or establish a brand-new mortgage.

Once you have created an application with me, I can submit it to an available lender who is offering a rate hold on an interest rate you want to take advantage of – all without a property attached.

For an example of how a rate hold works, consider this. On day one you submit your application to a lender for a fixed interest rate of 2.64% for five-years. On day 60, that interest rate moves to 3.12%. As long as your mortgage closes in the next 60 days, you are protected and can keep your lower rate of 2.64%. Plus, if rates happen to trend downward, you can also take advantage of the lower interest rate.

This rate hold does not commit you to working with that particular lending institution, nor does it commit you to working with me. It also does not hurt your chances of receiving an approval down the road! All it does is protect the agreed upon interest rate for you while you shop the market, so you don’t have to worry about it increasing while you are hunting for your perfect home!

Once the 120 days expires, if you have not found that perfect home fit or want to take advantage of different interest rates, there is nothing stopping you from submitting another rate hold! It will just be subject to the current rates on the day of submission.

If you are looking to purchase a new or secondary home this summer, please don’t hesitate to reach out to myself to get started on the pre-approval process and put your rate hold in place!

Cheers,

Morgan McAlpine

As a first-time buyer, there are some homebuyer mistakes you should avoid to ensure a smooth and successful experience!

FIXATING ON THE LOWEST INTEREST RATE
A reasonable interest rate is important, but not at the expense of heavy restrictions and penalties. Make a solid long-term plan to pay off your mortgage and then find one that’s flexible enough to accommodate life changes, both planned and unexpected.

THINKING YOU DON’T NEED A REAL ESTATE AGENT
You might be able to find a house on your own, but there are still many aspects of buying real estate that can confuse a first-time buyer. Rely on your agent to negotiate offers, inspections and other details. The money you would have saved on commission can be quickly gobbled up by a botched offer or overlooked repairs.

GETTING YOUR HEART SET ON A HOME BEFORE YOU DO YOUR HOMEWORK
The house that’s love at first sight may not always be what it seems, so keep an open mind. Plus, if you jump in too fast you may be too quick to go over budget or you might overlook a potential pitfall.

CHOOSING A FIXER-UPPER BECAUSE THE LISTING PRICE IS CHEAPER
That old character home may have loads of potential, but be extra diligent during the inspection period. What will it really cost to get your home to where it needs to be? Negotiating a long due-diligence period will give you time to get estimates from contractors in case you need to back out.

COMMITTING TO MORE THAN YOU CAN AFFORD
Don’t sacrifice retirement savings or an emergency fund for mortgage payments. You need to stay smart to life’s changes and overextending yourself could put your investments—including your house—on the line.

GOING WITH THE FIRST AGENT WHO FINDS YOU
Don’t get halfway into house hunting before you realize your real estate agent isn’t right for you. The best source: a referral from friends. Ask around and take the time to speak with your potential choices before you commit to a realtor.

DIVING INTO RENOVATIONS AS SOON AS YOU BUY
Renovations may increase the value of your home, but don’t rush. Overextending your credit to get upgrades done fast doesn’t always pay off. Take time to make a solid plan and the best financial decisions. Living in your home for a while before renovating will also help you plan the best functional changes to the layout.

CHOOSING A HOUSE WITHOUT RESEARCHING THE NEIGHBOURHOOD
It may be the house of your dreams, but annoying neighbours or a nearby industrial zone can be a rude awakening. Spend some time in the area before you make an offer and talk to local business owners and residents to determine the pros and cons of living there.

RESEARCHING YOUR BROKER AND AGENT, BUT NOT YOUR LAWYER
New buyers often put all their energy into learning about mortgage rates and offers. But don’t forget that the final word in any deal comes from your lawyer. Like finding a real estate agent, your best referral sources for a lawyer will be friends and business associates.

OPTING OUT OF MORTGAGE INSURANCE
Your home is your largest investment, so be sure to protect it. Mortgage insurance not only buys you peace of mind, it also allows for more flexible financing options. Plus, it allows you to take advantage of available equity to pay down debts or make financial investments.

If you are ready to search for your first home, don’t hesitate to reach out to me!

Nearly halfway through a three-year program to help first-time homebuyers, far fewer Canadians have taken advantage of it than what the government budgeted for.

Figures tabled in Parliament on Monday show that, as of Jan. 31, only 9,108 approved applicants had received the First-Time Home Buyer Incentive, which is in the form of a shared-equity mortgage.

Just $170 million has been disbursed in incentives, out of $1.25 billion the three-year program is worth. It began on Sept. 1, 2019, and is run by the Canada Mortgage and Housing Corporation.

If the program exhausted all its funding by the end of Year 3, it would help 100,000 Canadian families become homeowners, said federal officials in 2019.
The incentive is meant to help first-time homebuyers reduce their monthly mortgage payments. Applicants who qualify can borrow five or 10 per cent of the purchase price of a home to put toward a down payment.

Housing experts have said the low take-up of the program is because its eligibility rules don’t reflect skyrocketing house prices in Canada’s big cities.

The maximum home price eligible for the incentive is equal to four times the homebuyer’s income, with income capped at $120,000.

In an effort to increase access to homes in major cities, Ottawa announced in last November’s fall economic statement that it was changing the rules for homes in Toronto, Vancouver, and Victoria’s census metropolitan areas.

Instead of four times household income, the threshold increased this spring to 4.5 times household income, while the buyer’s income threshold was raised to $150,000. As a result, the maximum eligible home price in those three markets increased from $505,000 to $720,000.

But the changes may not have the desired effect, because home prices have risen dramatically during the pandemic.

More than 70,000 homes were sold in March, surpassing the previous record for the month by 22,000 purchases, the Canadian Real Estate Association said Thursday.

The average selling price of a Canadian home sold on the association’s MLS system was $716.828, up by 31.6 per cent in a year.

For the first time, the average selling price of a home in the Greater Toronto Area is now over $1 million, the Toronto Regional Real Estate Board said last month.

The dramatic increase in prices and sales has raised concerns that younger Canadians are being left out of homeownership, and that Canada’s housing market is overheated.

Last week, Canada’s banking regulator proposed raising the level of the mortgage stress test to ensure borrowers can afford higher rates, a move that would reduce the purchasing power of buyers by about five per cent.

Ottawa is watching the housing market “very closely,” and recognizes that rising prices have made it hard for many young Canadians to buy a home, Finance Minister Chrystia Freeland said late last month.

In a statement, Social Development Minister Ahmed Hussen’s office said Ottawa is making it easier for Canadians to afford a home by making the recent changes to the incentive, and by planning to spend $70 billion on a national housing strategy.

The homebuyer program will be “subject to a formal evaluation in due time,” said Mikaela Harrison, Hussen’s press secretary.

Only 85 applications have been submitted for Toronto mortgages through the homebuyer incentive, and only 44 were approved, according to the tabled data.

That’s fewer than the applications in St. John’s, N.L., for example, which had 89, of which 67 were approved.

Among Canadian cities, the program was most popular in Edmonton, which had 1,839 applications, 1,399 of them approved.

During the COVID-19 pandemic more than three million Canadians took advantage of deferred payments to help with financial issues.

According to Equifax, last year there were 900,000 deferred mortgages and 1.2 million deferred credit card payments.

These deferral programs have been winding down and payments are now getting back on track.

Deferred payments are not supposed to have an impact on your credit rating or score, but it could if a lender records a payment as missed or late instead of deferred.

Equifax Canada said it worked with lenders to implement reporting guidelines to make sure payments were not reported as late.

“They were reporting them as paid as agreed, because that’s technically what they were. The lender had made an agreement with the consumer that it was okay not to make a payment for some period of time,” said Julie Kuzmic, Director of Consumer Advocacy with Equifax Canada.

There have not been widespread problems, but there is a chance that some lenders could have mistakenly reported a deferred payment as late.

If they did, an error can have a lasting impact on your credit rating and score. Even a small error on your credit report can have a huge impact on your credit score and in terms of trying to get credit cards, a mortgage, or even a student loan, that can be the difference between getting a good rate, a bad rate, or no loan at all.

Unfortunately, errors on credit reports were happening even before the pandemic, which is why it’s important to check your credit report at least once a year or if you are expecting to apply for credit.

Equifax now allows you to check your credit rating and score online for free. If you find a mistake, you should takes steps to correct it right away.

Errors should be addressed with both credit reporting agencies Equifax and TransUnion. Correcting errors can take time and you may have to send supporting documents so you may need to check back several times to confirm errors have been fixed.

Even if you didn’t use deferred payments it’s still a good idea to check your credit rating and score. Equifax says when you check your own credit information there is no impact on your score number.

Cheers!

So you want to make a major home renovation. Congratulations! Now, you’ve got to find the right contractor for the job. While doing a thorough online search or asking family and friends is an important first step, once you find a potential contractor, it’s time to start treating the process like a job interview. Being prepared with the right questions protects you from future headaches, but also ensures that you’re happy with the end result.

Hiring a contractor for your big home reno? Ask these important questions to make sure you’re picking the right contractor.

1. Do you have a contracting license?
Depending on where you live, there are different requirements for what type of license a contractor has to hold. Check the laws in your region to see what might apply, and ask potential contractors directly whether they hold those licenses.

2. Do you carry the appropriate insurance?
According to the Canadian Homeowner’s Association, hiring people without the proper insurance could put you at legal and financial risk should something happen in your home. Protect yourself (and the workers improving your home) by checking off this box in the beginning, and ensure they have both liability insurance and worker’s compensation.

3. Will we get a written contract?
This should be a given if you’re working with a contractor because if the answer is no, don’t even bother moving forward with the interview. The CHBA says contracts should cover the description of the work, the materials used and the price of the job. You should also take this as an opportunity to figure out your payment schedule, as the Better Business Bureau in the U.S. says that you should never pay the full price of the job upfront, and the specific timeline for completing your project.

Contractors should also always offer a warranty in writing that informs you of what is covered and for how long.

4. What is your experience in home renovation?
This question can help you determine how long the contractor has been in the business, whether they’ve worked with similar challenges as those in your home and how they ensure that projects are completed on time. With this question, you get full insight into their methodology.

You can also find contractors in your area that might have positive Yelp reviews or other social media to see if others are happy with their work.

5. Can we get in touch with your past clients?
A contractor should be proud of their past work. Take this as an opportunity to figure out how contractors approach their work, whether they have effectively handled disputes and fact-check what contractors tell you about their working style.

6. Will you be responsible for building permits?
If there is a chance that your building requires permits, you want to make sure that your contractor is prepared in this area. Square One Insurance says you should try to be present for a contractor’s home inspection to ensure that you fully understand their feedback, and anticipate if any changes in your home need to happen.