Equity mortgage home equity loans are also known as “private mortgages” and “equity only mortgages”.
The most common reasons cited by banks for declining mortgage applicants for financing are past or current problems with credit and difficulty proving income.
There are many people who have difficulty proving income; some examples of these people are part time employees with multiple part time jobs, self-employed individuals, sub-contractors, peace workers and commissioned sales people. Those who are not employed full time with supporting paystubs, T4’s and job letters will have to produce a notice of assessment.
A notice of assessment is a tax form that the CRA sends to tax filers after their return has been processed. Some self-employed individuals may declare a low net income after writing off business expenses and when trying to apply for a mortgage, the bank tells them that they will only consider the income declared on their income tax return.
This is where equity mortgages come in. Equity only mortgages are typically arranged by mortgage brokers and funded by private lenders, mortgage investments firms and/or trust companies. Private mortgages do not put as much weight on your credit history or income type, they rely more on their security – the security being the equity in your home.
The amount of equity you have in your home is directly related to the amount of risk that you represent to potential lenders. Usually equity mortgages are arranged for up to 75% of a homeowner’s property value.
The lender will order an appraisal of the property, which will determine the value of the property. A property appraiser will visit the property and provide the lender with their educated opinion of the properties market value. The amount loaned will be based on a percentage of that amount.
For example if your property was appraised at a value of $300,000, a lender will offer you 75% of the value of your home. If your mortgage is $150,000 then the equity available would be $75,000.
Do your homework and ask lots of questions. Some private mortgages can be very expensive or “interest only”. Interest only mortgages involve setting your minimum monthly payment to match the monthly interest due. In this case no principal will be paid down at the minimum agreed payment therefore good pre-payment privileges are a necessity.
A relationship with a mortgage broker will lead you to being more informed about your options and an important fact to keep in mind is that in the province of Ontario mortgage brokers cannot charge you up-front fees. For more information about Equity Mortgage Home Equity Loans and home equity visit http://www.gtamortgagematters.com/
Monday, June 27, 2011
Tuesday, June 21, 2011
Consolidated Credit Solutions Includes Consolidating Your Debt
Solid consolidated credit solutions include reviewing your budget (looking for ways to save) and sometimes consolidating your debt! Taking a consolidation attack at improving your finances and credit will involve reviewing your budget, finances, credit, lifestyle, habits and more.
A multi-lateral plan will have to be drawn up and employed when creating your own consolidated credit solution. Here are some things you can do as part of your consolidated approach to improved financial health.
Request your credit report with your FICO Score (your credit score) to see what your credit looks like. Write down the different credit products, their interest rates and current balances.
Create a budget. Start by listing all of your monthly expenses from car insurance to groceries to wine. From there, look for ways to reduce your budget by 10% in each category.
If you own your home, start a relationship with a mortgage broker. You can make an appointment, where you will bring in your credit report and budget, ready to build a financial plan. If you own a home it could be the key, the final component of your consolidated credit solution.
Your home presents valuable security to a bank or any other lender that may enable you to obtain a consolidation loan at a low interest rate.
When considering using the equity in your home to consolidate your debt, it’s important to make informed choices. Yes, if you refinance your debt into your mortgage the interest will be much lower, however the amount of time you amortize your mortgage could have a counterproductive effect.
If refinancing your first mortgage to consolidate debt, consider reducing your amortization by a few years. This will only increase your payment slightly but at the same time it will reduce your overall interest significantly.
You could also consider a second mortgage, one that stands independent of your first mortgage. With a second mortgage, the interest rate is slightly higher but keep in mind that you can amortize it more aggressively and at a payment that would still be much lower than what you are paying to your creditors now.
As you can see by the points outlined in this article you have many choices when it comes to building your own personal consolidated credit solution. A good plan will ensure that you review all of your options and really come up with a strategy to work towards your financial goals. For more information about how you can build your own consolidated credit solution and consolidate your debt please visit http://www.gtamortgagematters.com/
A multi-lateral plan will have to be drawn up and employed when creating your own consolidated credit solution. Here are some things you can do as part of your consolidated approach to improved financial health.
Request your credit report with your FICO Score (your credit score) to see what your credit looks like. Write down the different credit products, their interest rates and current balances.
Create a budget. Start by listing all of your monthly expenses from car insurance to groceries to wine. From there, look for ways to reduce your budget by 10% in each category.
If you own your home, start a relationship with a mortgage broker. You can make an appointment, where you will bring in your credit report and budget, ready to build a financial plan. If you own a home it could be the key, the final component of your consolidated credit solution.
Your home presents valuable security to a bank or any other lender that may enable you to obtain a consolidation loan at a low interest rate.
When considering using the equity in your home to consolidate your debt, it’s important to make informed choices. Yes, if you refinance your debt into your mortgage the interest will be much lower, however the amount of time you amortize your mortgage could have a counterproductive effect.
If refinancing your first mortgage to consolidate debt, consider reducing your amortization by a few years. This will only increase your payment slightly but at the same time it will reduce your overall interest significantly.
You could also consider a second mortgage, one that stands independent of your first mortgage. With a second mortgage, the interest rate is slightly higher but keep in mind that you can amortize it more aggressively and at a payment that would still be much lower than what you are paying to your creditors now.
As you can see by the points outlined in this article you have many choices when it comes to building your own personal consolidated credit solution. A good plan will ensure that you review all of your options and really come up with a strategy to work towards your financial goals. For more information about how you can build your own consolidated credit solution and consolidate your debt please visit http://www.gtamortgagematters.com/
Tuesday, June 14, 2011
Bad Credit Consolidation Loans
Bad credit consolidation loans are offered to those who have struggled with their credit. The banks appetite for lending to those who have credit issues has lessened since the recession.
In 2005 many banks would finance a consumer who previously filed for bankruptcy, provided they had two years of re-established credit and a minimum credit score of 680. In the past a credit score in the 500’s was considered a bad credit score, however in today’s economic climate, a bank looks at a consumer with a 680 credit score as though they are high risk.
Banks are no longer obliged to give second chances. Banks such as Scotia Bank will not lend to a previous bankrupt at all, whereas some other banks will but only with many, many years of re-established credit.
Those who held on to their homes through the recession may have paid another price, namely their credit. Many hard working Canadians have left this recession loaded with debt and in a position where they have had no choice but to seek some form of debt relief.
No doubt your options will be limited if you have bad credit and need a consolidation loan. Some finance companies like Wells Fargo and Citi Financial, offer high interest consolidation loans (25%-30%) but even they will want to see a good credit score and at least two years of re-established credit.
If you own your home and you need a bad credit consolidation loan or are half way through a consumer proposal you may be able to leverage your home equity to consolidate your debt or payoff your consumer proposal.
There are many lenders who do not have a “retail” presence; you can access these lenders through a mortgage broker. Trust companies will extend equity financing to a customer who has struggled with credit based on the equity in their home. In addition so will some credit unions and private mortgage investment firms. Finally there are private lenders who will offer financing that major financial institutions won’t. Bottom line, a knowledgeable and well-connected mortgage broker is your best course of action.
You can use your home equity by refinancing your first mortgage or by taking out a second mortgage to consolidate your debt. This is also the most affordable way to obtain a bad credit consolidation loan because the interest is much cheaper than the unsecured loans offered by the high interest finance companies.
While customers who are looking for bad credit consolidation loans are finding at the retail level that there are fewer options out there, there are still many lenders who are willing to work with a consumer who has credit issues. The key is that you are taking positive steps towards rebuilding new and positive credit. For more information about bad credit consolidation loans please visit http://www.gtamortgagematters.com/
In 2005 many banks would finance a consumer who previously filed for bankruptcy, provided they had two years of re-established credit and a minimum credit score of 680. In the past a credit score in the 500’s was considered a bad credit score, however in today’s economic climate, a bank looks at a consumer with a 680 credit score as though they are high risk.
Banks are no longer obliged to give second chances. Banks such as Scotia Bank will not lend to a previous bankrupt at all, whereas some other banks will but only with many, many years of re-established credit.
Those who held on to their homes through the recession may have paid another price, namely their credit. Many hard working Canadians have left this recession loaded with debt and in a position where they have had no choice but to seek some form of debt relief.
No doubt your options will be limited if you have bad credit and need a consolidation loan. Some finance companies like Wells Fargo and Citi Financial, offer high interest consolidation loans (25%-30%) but even they will want to see a good credit score and at least two years of re-established credit.
If you own your home and you need a bad credit consolidation loan or are half way through a consumer proposal you may be able to leverage your home equity to consolidate your debt or payoff your consumer proposal.
There are many lenders who do not have a “retail” presence; you can access these lenders through a mortgage broker. Trust companies will extend equity financing to a customer who has struggled with credit based on the equity in their home. In addition so will some credit unions and private mortgage investment firms. Finally there are private lenders who will offer financing that major financial institutions won’t. Bottom line, a knowledgeable and well-connected mortgage broker is your best course of action.
You can use your home equity by refinancing your first mortgage or by taking out a second mortgage to consolidate your debt. This is also the most affordable way to obtain a bad credit consolidation loan because the interest is much cheaper than the unsecured loans offered by the high interest finance companies.
While customers who are looking for bad credit consolidation loans are finding at the retail level that there are fewer options out there, there are still many lenders who are willing to work with a consumer who has credit issues. The key is that you are taking positive steps towards rebuilding new and positive credit. For more information about bad credit consolidation loans please visit http://www.gtamortgagematters.com/
Monday, June 6, 2011
Credit Debt Consolidation – What is it and what options are available?
Our first inclination is to always encourage a homeowner to turn to their home for a credit debt consolidation, strictly due to the fact that it’s the most affordable and flexible choice.
We wrote this article to talk about ALL of the credit debt consolidation choices available to anyone who struggles with debt. Let’s discuss the 5 most widely advertised credit debt consolidations.
Unsecured consolidation loan. There are many variations of unsecured consolidation loans that include lines of credit (often offered by banks) and term loans (offered by banks and finance companies). This is a viable option if your total debt is relatively small (less than $10,000). Compare the rate of the term loan against the rate of the consolidation loan. Do not take out a consolidation loan at a higher rate of interest than what you are currently paying to your credit cards. Some loans have “front loaded” interest, meaning the first payments will go primarily to interest. Ask a lot of questions. What is the interest rate? What is the term? Is there a balloon payment at the end? Is the interest front-loaded? Etc.
Home equity loans.There are also many types of home equity loans, from lines of credit to mortgages. A home equity loan does not impact your first mortgage because it sits in second position on title to your home. The home equity loan is secured against your homes equity. Depending on your credit, home equity loans charge significantly less interest than unsecured consolidation loans and offer more flexibility when negotiating your monthly payment. Home equity loans are offered by banks, finance companies and are available through most mortgage brokers.
Credit Counselling. Credit counselling is intended for people who have a low income and a limited amount of debt (less than $10,000). Credit counselling programs involve making a single payment to a credit counselling agency that is in turn distributed to your creditors. Due to the fact that it involves paying your creditors less than your contractual minimum payment, the end result is that it will damage your credit.
Consumer Proposals. Consumer proposals are administered by trustees in bankruptcy and involve making a settlement to your creditors that is much less than you actually owe. If accepted by your creditors you will make a single payment to a bankruptcy trustee for 3, 4 or 5 years. A consumer proposal can be paid off at any time and is removed from your credit report three years from the date it is paid in full.
Bankruptcy. A bankruptcy trustee also administers bankruptcy and once you are bankrupt you will be obliged to the trustee for a period of time. While undischarged you will make a monthly payment to the bankruptcy trustee based on your income. Each month you must report your income along with participating in credit counselling sessions. A bankruptcy will remain on your credit report for 6 years after you have satisfied the obligations to your trustee and become discharged.
For more information about credit debt consolidation visit www.gtamortgagematters .com.
We wrote this article to talk about ALL of the credit debt consolidation choices available to anyone who struggles with debt. Let’s discuss the 5 most widely advertised credit debt consolidations.
Unsecured consolidation loan. There are many variations of unsecured consolidation loans that include lines of credit (often offered by banks) and term loans (offered by banks and finance companies). This is a viable option if your total debt is relatively small (less than $10,000). Compare the rate of the term loan against the rate of the consolidation loan. Do not take out a consolidation loan at a higher rate of interest than what you are currently paying to your credit cards. Some loans have “front loaded” interest, meaning the first payments will go primarily to interest. Ask a lot of questions. What is the interest rate? What is the term? Is there a balloon payment at the end? Is the interest front-loaded? Etc.
Home equity loans.There are also many types of home equity loans, from lines of credit to mortgages. A home equity loan does not impact your first mortgage because it sits in second position on title to your home. The home equity loan is secured against your homes equity. Depending on your credit, home equity loans charge significantly less interest than unsecured consolidation loans and offer more flexibility when negotiating your monthly payment. Home equity loans are offered by banks, finance companies and are available through most mortgage brokers.
Credit Counselling. Credit counselling is intended for people who have a low income and a limited amount of debt (less than $10,000). Credit counselling programs involve making a single payment to a credit counselling agency that is in turn distributed to your creditors. Due to the fact that it involves paying your creditors less than your contractual minimum payment, the end result is that it will damage your credit.
Consumer Proposals. Consumer proposals are administered by trustees in bankruptcy and involve making a settlement to your creditors that is much less than you actually owe. If accepted by your creditors you will make a single payment to a bankruptcy trustee for 3, 4 or 5 years. A consumer proposal can be paid off at any time and is removed from your credit report three years from the date it is paid in full.
Bankruptcy. A bankruptcy trustee also administers bankruptcy and once you are bankrupt you will be obliged to the trustee for a period of time. While undischarged you will make a monthly payment to the bankruptcy trustee based on your income. Each month you must report your income along with participating in credit counselling sessions. A bankruptcy will remain on your credit report for 6 years after you have satisfied the obligations to your trustee and become discharged.
For more information about credit debt consolidation visit www.gtamortgagematters .com.
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