What is an Interest Rate Differential? (IRD Calculation)2020-06-11T13:47:25-07:00

The interest rate differential is calculation method lenders will use to break your mortgage early if needed.  Simply put, depending on how far you are in the term of your product,  they will equate the “Interest Rate Difference” using the remaining balance on the term compared to current rates and the balance of interest owing.  Be careful!  Lenders are very crafty in their calculation methods and rarely disclose properly upfront how much it will cost you to break your mortgage.  Many “low rate” products have the worst IRD calculation, costing you thousands!  Watch this video for a good understanding.

What are Mortgage Pre-Payment Privileges?2020-06-11T13:17:31-07:00

Mortgage Pre-Payment Privileges allow you to pay down the principle of your mortgage penalty free!  Every lender is different.  Some lenders have “cheaper” rate options, but only allow 5-10% privilege annually.  Standard pre-payment privileges range from 15-30% annually.  This may not sound like an important feature if your goal is to simply pay the minimum monthly payments.  But higher pre-payment privileges give you more flexibility if you ever need to break your mortgage term early (Selling, Refinancing, Renewing at lower rates etc.).

What is a Bona Fide Sales Clause?2020-06-11T13:17:15-07:00

A bonafide sale clause is a contract restriction that forces you to stay with lender until the term is up, unless you sell the property non-arms length.  Even then, the penalty when you break the mortgage early if you sell can be much higher than standard mortgage products!

If you try to refinance, go to another lender, or seek lower rates in a more competitive market; the lender will sue you for breach of contract!  Avoid bona-fide sale clause mortgage products, even if their interest rate looks shiny and low, it could cost you thousands more in the long term.

What Makes Up Your Credit Score?2017-05-10T22:55:16-07:00

What Makes Up Your Credit Score?

The algorithm for calculating your Equifax / Transunion Credit Score can be rather mind boggling.  However, it’s actually quite simple what impacts your beacon, and why.  Below are the 5 key components of what makes up your credit score:


Payment History

This makes up about 35% of your score, it’s crucial to pay your bills on time.  Even if you miss $5 dollar payment on a credit card, it can produce the same negative effect as missing a $500 payment!  Don’t skip minimum payment requirements.  Always be aware of whom you owe money to—even if it’s just a parking ticket; left too long and this could go to collections which will damage your score immensely!


Utilization Ratio

This is your level of indebtedness. This is how much of your total available credit you’re using. Try to keep your balance below 35% of your credit limit, and don’t ever go over 70%, even if you pay it off every month.  For example, if you have a $10,000 Credit Card, don’t allow the limit to exceed $7,000.  It is better to obtain a seperate credit card or increase your limit, then to go beyond the 70% utilization ratio.


Length of Credit

The longer you have an account open, the better. Think of it as a good track record. It shows you’re capable of managing credit.


Types of Credit

It’s good to have a mix of different types of credit to show that you can manage your financials well.  But use caution as to what types of credit you have.

For example:  A mortgage reporting on your credit history will produce a strong beacon score vs. a payday loan which can show you are a higher risk borrower.

General rule of thumb: Have at least 2 credit cards, a line of credit, and a mortgage reporting for at least 2 years plus and you will be a beacon stud!

Did you know?:  95% of banks require you to have at least 2 credit cards for a minimum of 2 years if you wish to qualify for “A” Credit rates!



These happen every time you agree to look to obtain credit.  But there is a big difference between a Hard Inquiry and a Soft Inquiry.

A hard inquiry happen’s when you open a bank account, a credit card, an auto loan etc.

A soft inquiry is when you search your credit history personally, or I help you obtain an report without “inquiring for credit”.

Note:  Equifax and Transunion view credit inquiries for different types of credit within the similar time frame as a major red flag that will impact your score.  If you are shopping for a mortgage, don’t shop for a Hot Tub or Auto Loan during this period, it could affect your approval!

credit score
Down Payment Confirmation2017-10-25T22:45:28-07:00

Purchase with Down Payment:

  • 90 day history of bank accounts showing down payment
    Sale of an existing property — a copy of the sale agreement
    90 day History of RRSP account (first time home buyers plans)

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Info on the Purchase | Refinance2017-10-25T22:37:10-07:00

If Purchase:

If Refinancing:

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Employment Details2018-05-11T09:50:39-07:00

If Employed:

If Self-Employed:

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Why don’t I just borrow money for my renovation from a seperate source?2016-11-03T12:03:31-07:00

You can and more then welcome too.  However the benefit of the Purchase Plus Improvements mortgage is you get an incredibly low mortgage rate PLUS a low renovation loan “All in One”.  You will not find any Home equity,  line of credit, personal loan, or credit card that comes close to saving you this much interest.

Why is the purchase plus improvements mortgage rate lower then typical?2016-11-03T11:23:24-07:00

Good Question. Because of our buying power as a licensed Mortgage Broker through the super broker network Verico Finex Lending. We are offered very low interest rates. But on top of that, in order to earn your business for your next home improvement project; we take a large chunk of our commissions earned by the bank and “buy down” the interest rate!

Contact Me Your Way.

Kyle Wilson, MBI | Kelowna Mortgage Broker

Pragmatic Lending Office

1915 Foxtail Terrace Kelowna BC V1P 1T9

Direct: 778.557.2314
Email: mail@kylewilson.ca
Web: KyleWilson.ca

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