Liens on Property – How to Deal with a Property Tax Lien

There are many different types of liens that can end up on an individual’s property. The liens on property can include; Canada Revenue Agency Tax liens, condo fee liens, liens that result from a judgement and property tax liens. A property tax lien, Canada Revenue Agency tax lien and a condo fee lien do not require a court order to be placed on your property. Whereas in Ontario if a private individual or company who wants to file a lien on your property first has to obtain a judgement against you through the Superior Court of Justice. 

Property tax liens in Canada are very serious because they take priority over all other liens and mortgages. When you have property tax arrears in Canada, you owe money to the government or the Queen. When a Municipality files a property tax lien against your property, it takes priority over even your mortgage. 

A property cannot be sold or refinanced with a property tax lien on it. In Ontario, a property tax lien is filed on the Province of Ontario Land Information System online and a bank or potential buyer of a property can find out if there is a property tax lien on your property at the click of a mouse. 

A property tax lien can grow at an alarming rate and falling into arrears on your property taxes has a real snowball effect. Liens on property once filed will be subject to interest and legal charges. Even if you come up with the money to pay off the debt that is associated with a property tax lien, the interest and legal fee will have to be paid in order for it to be removed. 

A property tax lien filed on a property by a municipality will result in a notification being sent to any mortgage holders. Because of the severity of a property tax lien and the position on title it will hold, many mortgage lenders once notified of a property tax lien may pay it on your behalf and then demand to be repaid in full. If you do not repay the mortgage lender, they could force your property into power of sale. 

The best thing to do if you have property tax arrears or liens registered on property that you own it to come up with a plan to pay the property tax arrears off. Easier said than done right? There are options. If you have some equity in your home, it is a better choice to refinance your home to come up with proceeds to pay off a property tax lien than to see your mortgage lender involuntarily do it on your behalf. 

Refinancing your first mortgage or taking out a new second mortgage is the best way to eliminate property tax arrears because the mortgage amortization will result in very little difference in increase to your mortgage payment. Using a line of credit or loan is less advisable because payments will be higher and you will still have your monthly property tax obligation so it may cause strain to your budget. 

Finally, it is always best to ask your first mortgage lender to collect your property tax payment with your mortgage payment. Doing so will feel like one less payment on a monthly basis and will reduce the opportunity for you to fall behind on your property taxes, ending up with a property tax lien. 

For more information about liens on property and how to deal with a property tax lien please contact Paul Mangion at GTA Mortgage Matters by calling 416 204 0156 or visit www.gtamortgagematters.com.

Mortgage Arrears! What You Can Do If Your Mortgage Payments are in Arrears?

The past few years have been very tough for many Ontario homeowners. Skyrocketing costs of food, gas, home heating, in addition to credit card and personal debt has left many families strapped for cash and wondering how they will make ends meet each month. 

The absolute last thing you want to have happen is to have your mortgage payments fall into arrears. When mortgage arrears occur you can become at risk of losing your home. Also, when mortgage arrears compound they can become so high that they become difficult to pay up to date. 

Before you can deal with your mortgage payment arrears you must first explore what led to the arrears in the first place. The tools that you can use to deal with mortgage arrears are the same tools that you can use to deal with other financial problems that are fuelling the issue. 

If your mortgage arrears were caused because your personal expenses to maintain your home have increased and that combined with payments to credit cards and loans have become impossible to pay each month, will be crucial to come up with a strategy to reduce your overall monthly payments.

Bankruptcy trustees and debt counsellors promote Federal Government programs and debt consolidation to reduce interest on debt and monthly payments. The problem is that the vehicle used to achieve this is often a debt settlement or consumer proposal which will have a devastating impact to your credit and will permanently destroy relationships with creditors that you have built up over the years. 

If you want to reduce your monthly payments and reduce relationships with your creditors and preserve your credits, you must pursue debt consolidation options that honour your obligations to your creditors but also reduce your monthly payments. 

If you do not yet have mortgage arrears but know that things are headed in that direction, you must act fast because your options will change once your mortgage payments are in arrears. 

Using your home is the fastest and most affordable way to consolidate debt and reduce monthly payments. You may be thinking that your bank has already said no but the bank is not the only option. There are many other lenders like trust companies, credit unions, mortgage investment companies and even private lenders that will offer mortgage financing when the bank won't. A good Mortgage Broker will have access to these financial resources. 

Once your mortgage payments are in arrears your options will be less. Most mortgage lenders will require that your mortgage payments are up to date before they will extend mortgage financing. The only lenders that will make a concession in this scenario are lenders who offer equity only mortgages. This means that they will lend to you based on the amount of equity you have in your home, not based on your personal credit. In this case, you will require a little bit more equity in your property. 

If you are in this situation, the best thing you can do is take the steps to resolve your mortgage arrears or impending mortgage arrears before you put your house at risk. For more information about mortgage arrears and what you can do if your mortgage payments are in arrears, please contact Paul Mangion at GTA Mortgage Matters by calling 416-204-0156 or visit www.gtamortgagematters.com

What is a Closed Variable Rate Mortgage?

A variable rate mortgage is a mortgage that bears an interest rate that floats with the prime rate set by the Bank of Canada. If mortgage interest rates go down, so does the mortgage rate of a client who has a variable rate mortgage. Likewise if mortgage interest rates go up, so does the mortgage rate of a client who has a variable rate mortgage.

In the past several years mortgage interest rates in Canada have been at historic lows and so many Canadian homeowners continue to maintain variable rate mortgages.

A closed variable rate mortgage is a mortgage that offers a variable rate but is also closed. Banks generally offer closed variable rate mortgages over 1, 3 or 5 years.

Choosing a closed variable rate mortgage means that you will be guaranteed that your mortgage interest rate discount from the banks' prime rate (if you have negotiated a discounted rate) will remain the same throughout the term of your mortgage. The same is true of you don’t have a discounted interest rate and you are paying at prime or even one or two percent above prime.

Some variable rate mortgages are re-calculated immediately while others are recalculated monthly or even every three months. A closed variable rate mortgage (just like an open variable rate mortgage) could mean that your monthly payment would be fixed throughout the term. This would mean that if the Bank of Canada's interest rate changed (up or down) the amount of your payment that is allocated to principal and interest would be adjusted accordingly. In other cases and if you select a changing payment schedule, your actual mortgage payments would increase or decrease according to whether the Bank of Canada's lending rate has been increased or decreased.

All variable rate mortgages enable you to lock in anytime to a fixed mortgage interest rate. Generally, you can amortize your mortgage payments up to 30 years. You can select a monthly repayment schedule that is monthly, semimonthly, weekly or biweekly.

So how can you determine if a closed variable rate mortgage is right for you? Typically you would select a closed variable rate mortgage if you anticipate that the prime lending rate is going to go down. You have to be sure that you can accept the risk that if the prime lending rate goes up, so will your mortgages interest rate.

Primarily the world economy will dictate what happens with national lending rates. If you are going to choose a variable rate mortgage product pay attention to the news. Signs that the world's economy is improving will generally result in interest rates going up. Alternatively, signs of a weakening world economy will generally signal that mortgage interest rates will stay the same or even go up.

Staying informed will be the best way to forecast what is going to happen with your mortgage, otherwise a fixed rate mortgage product may be better for you. For more information about closed variable rate mortgages please contact Paul Mangion at GTA Mortgage Matters by calling 416-204-0156 or visit www.gtamortgagematters.com.

Home Mortgage Refinancing in Ontario – Top 3 Mortgage Financing Tips

Home mortgage refinancing in Ontario is a very viable option that more and more homeowners have come to rely upon to raise much needed capitol. The most common reason that homeowners refinance their homes are:

1.       To negotiate a lower interest rate on their mortgage

2.       To consolidate debt

3.       To finance big ticket purchases like home renovations, children's education and expensive home furnishings/appliances, just to name a new.

The reason that home mortgage refinancing in Ontario has become so popular is because consolidating debt and big ticket purchases is much cheaper when leveraging home equity. A mortgage or home equity loan is much less interest than credit cards, lines of credits and personal loans. There is also much more flexibility with monthly payments, and monthly payments are generally much lower.

Here are our top 3 mortgage financing tips if you are thinking of applying for home equity refinancing in Ontario.

Mortgage financing tip #1 – Establish a relationship with a local Mortgage Broker. This will increase your borrowing power and ensure that you obtain a competitive deal on your new mortgage. Mortgage Brokers in Ontario arrange mortgages through all the major banks, plus they have access to alternate funding sources like trust companies, credit unions, mortgage investment corporations and private lenders.

Often times when your bank won't approve mortgage refinancing or won't offer you a better mortgage interest rate, a Mortgage Broker will be able to secure the financing. Also, when you go directly to your bank there is no competition. You will only be offered what they want to offer you and each time you apply for credit it results in another inquiry on your credit report, which can impact your credit score. A Mortgage Broker will request your credit report in a single instance and use the credit report to shop your deal around.

Mortgage refinancing tip #2 – Check your credit report before looking for financing. Request your credit report to ensure that there is nothing improperly reported and so that you know your credit score before looking for a mortgage. Your bank will generally approve credit based on your credit score. The lower it is, the higher the interest rate they may offer you. Sometimes it pays to see and work on having a good credit score before looking for mortgage refinancing in Ontario. Generally in Ontario a 680 beacon score is considered good.

Mortgage refinancing tip #3 – Use an online mortgage calculator to compare mortgage payments based on different amortizations. By default, most banks will quote your new mortgage repayment based on a 25 or 30 year amortization. This is no way to get your house paid off quickly and will mean that you end up paying more interest in the long run. Shaving years off of your amortization often results in very little increase to your mortgage payment.

All in all mortgage refinancing could result in you getting the most competitive deal, so it is important to do your research and be prepared for when that time comes you are ready! For more information about mortgage refinancing in Ontario and our mortgage financing tips please contact Paul Mangion at GTA Mortgage Matters by calling 416-204-0156 or visit www.gtamortgagematters.com.

The Mortgage Centre Mississauga Top 3 Mortgage Financing Tips for 2012

With the Holiday season and New Year right around the corner the Mortgage Centre Mississauga is happy to publish our top 3 mortgage financing tips for 2012.

Mortgage financing tip number 1 - Your bank is not the only game in town.

Many individuals are misguided and think that the bank is the only place to obtain a low interest mortgage. Some think that when their bank declines them for mortgage financing, that it is a sign that they have credit problems. More times than not the bank simply has very conservative lending practices and if you fall an inch outside of their guidelines, you may be declined.

Mortgage financing tip number one is to develop a relationship with a good local Mortgage Broker who can access other funding sources like trust companies, credit unions and mortgage investment corporations. The institutions often offer mortgage interest rates that are comparable to the bank’s mortgage interest rates and won’t make you jump through hoops to get a low interest mortgage approval.

Mortgage financing tip number 2 – If you are using your new mortgage to pay off debt, pay attention to your mortgage amortization. Many people who refinance their home to consolidate debt, make the mistake of extending their mortgage amortization back out over 25 to 30 years. Sometimes a mortgage broker or bank will re-arrange your mortgage this way, assuming that’s what you want.

Ask lots of questions. A mortgage amortized over 20 years will not bear that much greater of a payment than a mortgage financed over 25 years. When you look at all the money you will save on monthly payments as a result of consolidating your debt, there may even be enough savings to reduce the amortization that is left on your mortgage which will see you get your home paid off much faster.

Mortgage financing tip number 3 – Variable rate mortgages are still a favourable choice when obtaining mortgage financing. Mortgage interest rates in Canada are still at historic lows. Ride the low interest mortgage rate wave while you can. Some folks fear variable rate mortgages because they know that if interest rates increase, so will their mortgage rates. Many lenders who offer variable rate mortgages offer an option to lock-in. This means that if mortgage interest rates go up, you can lock into a fixed rate mortgage at any time.

If you are thinking about refinancing your mortgage, the end of the year is a better time than ever to do it. People who list their homes over the holiday season will often list for less because so many folks are pre-occupied with the holiday season so there is less demand. This is a perfect opportunity to get a great deal on a home. If you were thinking of securing mortgage financing to consolidate your debt, you are in a position to start the New Year with a single low monthly payment.

We at the Mortgage Centre Mississauga wish your family all of the best in the upcoming holiday season and the New Year and hope that you have found these top 3 mortgage financing tips useful.

For more information about the Mortgage Centre Mississauga and our top 3 mortgage financing tips for 2012 please contact Paul Mangion by calling (416) 204-0156 or by visiting www.gtamortgagematters.com.

Toronto Christmas Sales on Mortgages – Consolidate Debt and Start 2012 Debt Free

Christmas is right around the corner and there is so much to do. It seems that every Christmas season our schedules are filled with work holiday parties, family get-togethers and let’s not forget Christmas shopping. The last thing on most people’s minds are bills, that is unless you are one of the many Greater Toronto Area (GTA) families carrying a large debt load coming into the holiday season.

Many families are still recovering from debt that they incurred during and after the recent recession. Yes, it was three years ago but to most it feels like yesterday, especially when reviewing monthly credit card statements.

When times get tough it is easy to turn to credit cards to make ends meet and three Christmas’s post-recession, the average debt load of a GTA family sits at $40,000, which is a staggering number. To save money we might find savings by pursuing Christmas sales. Christmas sales are not only found at the mall. There are Toronto Christmas mortgage sales on mortgages all around us.

You may be thinking, Christmas mortgage sales? I have no time to think about my mortgage right now! Now is a better time than ever to take a good hard look at your mortgage and here’s why. Interest rates are still at historic lows and are much lower than the interest you are paying on your credit card debt. You can consolidate debt and start 2012 debt free.

Just like your local Toronto shopping centre may be promoting their latest deal, many Mortgage Brokers in the GTA are holding fantastic Toronto Christmas sales on mortgages, helping families in the GTA to consolidate their debt. The average time it takes to refinance a mortgage in the GTA is 2-3 weeks, so there is more than enough time to get your finances straight before the holiday rush.

If you want to refinance your mortgage to consolidate your debt by obtaining a new first mortgage, a second mortgage or a home equity line of credit, it is a simpler process than you may think, that is if you have a good Mortgage Broker.

1.       Your first step should involve finding out who is offering Toronto Christmas sales on mortgages.

2.       Once you make an application for a new mortgage, it usually takes 2-3 days to get approved if you provide complete information.

3.       If you obtain a CMHC insured mortgage, you will not need to have your home appraised. If you are obtaining a mortgage that is not CMHC insured and need an appraisal, this is not a big deal. An appraisal can usually be completed in 3-4 days (depending on your schedule) and simply involves an Appraiser making a brief visit out to your home.

4.       Next you will visit your Mortgage Broker to sign your new mortgage documents and the documents will be sent back to the mortgage lender who was offering the Toronto Christmas sale on mortgages.

5.       Finally, you will have to attend one final appointment to sign off on the final mortgage documents and presto, you will receive your money.

You can use that much needed cash to pay off your credit card and other debt and the best part is you will sail through December bill free. When January comes, you will not have to face the landslide of credit card bills you likely have in past years. Because you have made the wise choice to consolidate debt before the New Year, you will start January paying less interest and a single low monthly payment. Doesn’t this idea just make you want to sing Jingle Bells?

For more information about Toronto Christmas sales on mortgages to consolidate debt and start 2012 debt free contact Paul Mangion by calling (416) 204-0156 or by visiting www.gtamortgagematters.com.

Debt Relief Options Start at The Mortgage Centre in Mississauga

Debt relief options can sometimes be limited to where you live. Homeowners in the greater Toronto area, including in Mississauga, tend to have more mortgage refinancing options than homeowners in rural areas or areas outside of major cities.

Mortgage refinancing is a great choice if you are looking for debt relief options. If you own a home, refinancing your mortgage can offer you debt relief options and flexibility. Mortgages are often less interest than unsecured loans and other forms of debt consolidation. Mortgages also offer a single low monthly payment and enable you to preserve your credit report, credit score and relationships with your creditors.

As a result of aggressive advertising on the part of Bankruptcy Trustees and Debt Counsellors who advertise debt consolidations, many consumers find themselves making debt settlements with their creditors or filing consumer proposals to find debt relief. This can have devastating impacts to your credit report, destroy your relationships with your creditors and limit future financial options. Often consumers think that they are getting a debt consolidation when they do this, but debt settlements and consumer proposals are not debt consolidations.

If you own your home there are often other debt relief options out there that don’t involve debt settlements or consumer proposals that destroy your credit. You may be thinking that you have applied to your bank for a mortgage to consolidate debt in the past and were told no, or that your credit is so bad that no one will offer you a mortgage. This is often not the case.

Mortgage brokers have access to many mortgage financing options outside of the bank. The Mortgage Centre in Mississauga is an example of a super brokerage who deals with many lenders outside of the bank. Super brokers are the most reputable Mortgage Brokers you can deal with. These are not independent brokers. Super brokers like the Mississauga Mortgage Centre are part of a large mortgage broker network and with that comes credibility and accountability. There are over one hundred locations in the mortgage centre franchise.

Through super brokers like the Mississauga Mortgage Centre you can obtain mortgage financing through lenders like finance companies, trust companies, credit unions, mortgage investment corporations and private lenders. These lenders are not as strict as the major banks and will often grant financing to an individual who has some past bad credit or difficulty proving their income.

Proceeds of a mortgage refinance can be used to pay off credit card debt and start fresh with a single low monthly payment. This is a debt relief option that can not only provide you with a fresh financial start but can also enable you to rebuild your credit as opposed to destroying it.

When refinancing your home, discuss all of your financial options with your Mortgage Broker. Mortgage refinancing can provide a lot of financial flexibility. Choices could include a new first mortgage, a second mortgage or a personal home equity line of credit – all of which are good debt relief options to deal with debt.

For more information about debt relief options and the Mortgage Centre in Mississauga contact Paul Mangion by calling (416) 204-0156 or by visiting www.gtamortgagematters.com

Mississauga Mortgage Broker Finds the Low Interest Mortgage Financing Options over the Holidays

The holiday season is right around the corner and holiday shopping mania is about to begin. Whether you like to prepare for the holidays in advance or are a last minute shopper, holiday financial planning could mean the difference between a stress free new year and facing a landslide of credit card bills.

Homeowners have many options as it relates to holiday financial planning and now is a better time than ever to consider consolidating your debt. Your home is your best shot at securing low interest mortgage financing and there are currently many low interest mortgage financing options available in Ontario.

Low interest mortgage financing options could include a secured line of credit, a first mortgage refinance or a second mortgage, and the best option for you will depend on your personal financial circumstances and the type of debt you are looking to consolidate.

Those who don’t have a lot of debt ($15,000 or less) may be best suited for a line of credit. Lines of credit generally offer low interest rates and you only use what you need. A line of credit is considered a low interest mortgage financing option and gives you the flexibility of a low monthly payment with an option to pay as much as you want (when you have extra money). If you live in Mississauga, a Mississauga Mortgage Broker can help you to obtain a low interest line of credit that offers you the maximum benefits.

If you owe $16,000 - $25,000 in debt a second mortgage may be the best choice. Because second mortgages offer a fixed repayment, this low interest mortgage option will enable you to consolidate your debt and fix your monthly payment so that you know when you will be debt free. With second mortgages, you can set your amortization as low as 5 years which is essentially a 5 year consolidation loan. After you make your payments over 5 years, your debt is paid in full. A $25,000 mortgage financed on a 5 year amortization could bear a monthly payment as low as $500 per/month.

If you owe more than $25,000 in debt, refinancing your first mortgage is likely the best choice. Once you have accumulated a significant amount of debt, a second mortgage amortized over a short period of time may bear a monthly payment that is too much for your budget to take. Refinancing your first mortgage is an excellent low interest mortgage financing option that will create immediate cash flow and put an end to multiple payments to various credit cards.

All of these low interest mortgage financing options will enable you to consolidate your debt, will reduce your payments to one single monthly payment and allow you to start the New Year off without the usual landslide of credit card bills come January. Homeowners in Mississauga should consider speaking to a local Mississauga Mortgage Broker for the lowest interest mortgage financing options that are available locally. For more information about low interest mortgage financing options from Mississauga Mortgage Broker Paul Mangion, call 416 204 0156 or visit www.gtamortgagematters.com

Canadian Mortgage Refinancing Part 4 – The Lowest Interest Rate Doesn’t Mean the Lowest Mortgage Interest

Canadian Mortgage Refinancing can be complex and the lowest interest rate doesn’t mean that you have the lowest interest mortgage. A mortgage involves a mortgage term, mortgage amortization and interest rate. Each will impact the amount of interest that you pay on your mortgage.

Mortgage interest compounds. There are several different ways that mortgage interest can compound and they are daily, monthly, semi-annually and annually (to name the most common frequencies to which mortgage interest can compound). For example, line of credit interest will almost always compound monthly (12x per/year), whereas conventional mortgages will often compound semi-annually (2x per/year). The more frequent the interest compounds, the more interest you pay. If a bank offered a 6% interest rate compounded monthly or a 6% interest rate compounded semi-annually, you would pay more interest in the example where the interest compounded monthly.

Some mortgages are “interest only” meaning that the monthly payments are calculated based on you only making interest payments monthly and interest only mortgages often compound monthly. Lines of credit and interest only mortgages offer the least likelihood of paying down your mortgage, unless you pay much more than your minimum monthly payment each month.

An ideal mortgage is one where the interest compounds semi-annually or annually and involves a monthly payment that pays both principal and interest. Usually a fixed rate mortgage will involve and interest rate that compounds semi-annually whereas a variable rate mortgage will often compound monthly.

Your mortgage term is the amount of time that your interest rate is guaranteed. This can be a double edge sword because locking in for a long time will ensure that your interest rate is secured but if interest goes down, the interest rate on your mortgage will not. With mortgage interest rates in Canada being at all-time lows many folks opt for variable rate mortgages that offer an option to lock in.

Your mortgage amortization will dictate how long you have to repay your mortgage. If you want to pay the lowest mortgage interest, well, the lower your amortization, the less mortgage interest you will pay. You don’t have to take out a mortgage that is amortized over 30 years. Plan your budget and mortgage payment based on a 20 or 25 year amortization and you will save thousands of dollars in interest overall.

Canadian mortgage refinancing can be negotiated at interest rates and terms that gives you the most for your borrowing buck but should be planned carefully. A local mortgage broker will almost always understand real-estate in your area and what mortgage products are available. You don’t want to end up with a mortgage where you think you have the lowest mortgage interest rate but are not actually paying the lowest mortgage that you could be.

You work hard for your money and you deserve to have a mortgage that will provide you with a great mortgage interest rate and terms that you can live with. This will not just come to you, you have to be informed and look around to find it.

For more information about Canadian mortgage refinancing, how to get the lowest mortgage interest rate and actually pay the lowest mortgage interest visit www.gtamortgagematters.com or call Paul Mangion at 416-204-0156.

Canadian Mortgage Refinancing Part 3 – What Does it Mean to Refinance Your Home or Get a 2nd Mortgage?

Canadian Mortgage refinancing could be the refinancing of a first mortgage or it could be a new second mortgage. Any time you own your home and obtain new mortgage financing, it is considered mortgage refinancing. The question is with all of the choices available it is often unclear which is the best choice?

Refinancing your first mortgage can be a good choice but can also carry negative implications if it is not arranged properly. The longer you agree to repay debt, the more money the bank earns. For example, if you have 19 years left on your mortgage amortization, many financial institutions and brokers will quote your new mortgage based on a 25 year or 30 year mortgage. This may save you a couple of hundred dollars per/mo. When you look at the amount that you are paying to debt and what the mortgage would look like if amortized over the 19 years as an example, a mortgage refinance keeping your existing amortization at the 19 years will in many cases still free up a significant amount of cash flow and save you a significant amount of interest.

Refinancing your first mortgage carries many benefits. More and more folks are choosing second mortgages as an effective way to keep their consumer debt separated from their first mortgage debt. This is the best way to see that you actually pay off your first mortgage. Choosing to refinance your home and get a second mortgage provides a lot of flexibility, but the bank in this case will often recommend a line of credit or that you amortize your new second mortgage over 20 or 25 years to provide you with “the lowest monthly mortgage payment”. The end result is a never ending payment that never gets your debt paid off because it will often only pay interest. Most people will just pay the minimum amount due on their statement each month, which often represents mostly interest. This makes the banks a lot of money.

Canadian mortgage refinancing can be achieved in a manner that is favourable to a consumer but for this to happen the consumer must be informed. If you were to get a second mortgage, amortization is important. If you owed $20,000 as an example and you amortized your repayment over 15 years you would have a monthly payment of approx. $250 per/mo. If you amortized the same amount of debt over 5 years you would have a monthly payment of approx. $450 per/mo. The 5 year amortization would see that you would be debt free in 5 years and that your first mortgage was not interrupted. When you look at your minimum payments to your credit cards, which only cover interest in most cases, the 5 year amortization could put hundreds of dollars per/mo. of cash flow back into your pocket.

We don’t really advocate lines of credit because they are like taking out one big credit card and there is no fixed repayment term (no end in sight) so we would recommend that you get a second mortgage over a line of credit.

No matter which way you go, don’t make any choices before you get informed about Canadian mortgage refinancing. You can get a second mortgage, first mortgage or line of credit through a mortgage broker which is a more competitive option than going directly to your bank. A mortgage broker represents your best interest first. For more information about Canadian mortgage refinancing and what it means to refinance your home or get a second mortgage, first mortgage or line of credit please visit www.gtamortgagematters.com or call Paul Mangion at 416-204-0156.

Canadian Mortgage Refinancing Part 2 – Average Debt in GTA is $40k and Homeowners Refinance to Consolidate Debt

Canadian Mortgage Refinancing rates are a clear sign of the times. It is a sad day when the average debt load carried by a GTA homeowner is $40,000. That does not reflect money owed to mortgages, that reflects’ pure debt.

We cannot ignore the fact that the cost of living has skyrocketed in the GTA. Many people are still carrying debt that they took on 4-5 years ago and have not been able to pay down since because of the unexpected increase in the cost of living. The cost of living increase is due primarily to increased transportation costs that companies are passing down to the consumer. Everything is more expensive, from hydro to food to vehicle maintenance and more.

The fact that Ontario has elected a minority government in the 2011 provincial election is sending a clear message that many average families in Ontario are struggling financially and need some relief.

So let’s not focus on what the government can do for us but rather what we can do for ourselves. When debt reaches the point where credit cards are at their limits and your budget can only afford to cover minimum payments financial, decisions have to be made. The issue is that the big banks have set minimum payments so low that these payments are mostly only covering interest. You can pay and pay and pay but the likelihood of your balance getting paid off this way is low (unless you want to make minimum payments for the next 10-15 years).

Homeowners refinance to consolidate debt because it is often much less interest, much lower monthly payments and puts much needed cash flow into the budget. Canadian mortgage refinancing is more and more common because when it gets to the point (like in Toronto) that the average debt load is $40,000, well this is just too much.

$40,000 in debt at current credit card interest rates cost an average of $1,500 to $2,000 per/month in minimum monthly payments. Homeowners who refinance to consolidate debt are able to reduce their monthly payments to as low as $400 per/mo. This is a drastic monthly savings and a testament to why more and more homeowners refinance to consolidate debt.

Many reading this may be thinking that they have approached their banks for mortgage refinancing to consolidate debt and were told no. There are many reasons that this occurs. First, the big banks earn more when you are stuck making minimum payments at credit card interest rates. Because credit card interest rates are so high and because of the length of time it takes to repay at minimum payments, they will often earn more if you do not refinance to consolidate your debt.

Second, the bank’s lending practices have become much more stringent and even having credit cards that are maxed out is considered (by many banks) poor credit. Third, the real estate market has seen so much turbulence in the past couple of years that banks are lending on a more conservative basis.

Canadian mortgage refinancing is available through local mortgage brokers who access other institutional lenders like trust companies, finance companies, mortgage investment firms and even private lenders. If your bank has said no, that doesn’t mean that you do not qualify elsewhere for a mortgage.

If you would like more information about Canadian mortgage refinancing and how you can use your home to refinance to consolidate debt please contact Paul Mangion, Principal Mortgage Broker at the Mortgage Centre at 416-204-0156 or visit www.gtamortgagematters.com

Canadian Mortgage Refinancing Part 1 – Refinancing Your Home When you Have Credit Problems

Refinancing your home when you have credit problems can be done with the assistance of an experienced mortgage broker who works with lenders that don’t mind helping someone who has experienced problems with credit.

The difficulty you experience when trying to find financing will depend on the type of credit problem you have. Canadian mortgage refinancing has come a long way in the past 20 years. More lenders are willing to work with someone who has credit problems.

Before the last decade, the primary choices as it relates to mortgage refinancing in Canada were the bank or a private lender. In the past decade however, a host of companies have emerged that will offer bad credit mortgages. These include mortgage investment corporations, trust companies and finance companies.

Generally consumer’s who have credit problems that are currently impacting their credit or recently impacted their credit, will find that lenders will approve them on an equity basis. This means that if the client does not have equity, it will be less likely they will be approved. The rule of the thumb that most equity lenders follow is that they will lend between 75%-80% of a property's value including the new funds required.

We mentioned that the difficulty you experience will depend on the type of credit problem you have because some people think that their credit problem is much worse than it actually is. Lenders that will lend to a consumer who has had credit problems will usually look at a few primary factors.

What is the credit score? While many private lenders will not have a minimum credit score, finance companies and trust companies who will consider a bad credit loan will have a minimum “credit score threshold”. When refinancing your home, the minimum credit score could be 550, 580, 600, and sometimes 620. When a credit score is below 550, you will almost always have to obtain mortgage refinancing through a private lender.

Is there a history of recent late payments? If the borrower has made many late payments to loans and credit cards within the past year or two, this too could impact their ability to get a mortgage with a finance company or trust company and will likely mean that you will have to consider a private lender.

Someone who has previously had a bankruptcy or consumer proposal that was completed at least 2-3 year ago and they have 2-3 years of solid re-established credit, may not be considered as having credit problems at all. The same is true for a client who in the past year has only make one or two late payments but has paid all other credit well and all accounts are up to date and in good standing.

The best thing you can do if you think you may have credit problems and want to apply for Canadian mortgage refinancing is speak to your local mortgage broker. They will be able to review your credit with you, talk to you about what options are available and secure a mortgage for you.

For more information about Canadian mortgage refinancing or refinancing your home when you have credit problems please contact Paul Mangion at GTA Mortgage Matter by calling 416-204-0156 or visiting www.gtamortgagematters.com

Residential Mortgage Insurance with CMHC –When You Need It to Obtain a High Ratio Mortgage

One big reason that our banking system has fared better during the current worldwide economic instability is largely due to the regulation in our banking industry.

In Canada, in order to qualify for a residential mortgage with a “bank”, with less than 25% down payment, the bank must ensure that the mortgage is high ratio insured. While GE also offers high ratio mortgage insurance, the majority of high ratio mortgages that are insured in Canada are insured by CMHC.

Even if a bank approves your mortgage (or has a strong desire to) and CMHC declines the application for high ratio mortgage insurance, the bank will not be able to grant you the mortgage. This has opened up a whole marketplace of alternative lenders that offer high ratio mortgages. A lender, who is not regulated by the Chartered Banks Act, can fund a high ratio mortgage without residential mortgage insurance.

Your most affordable high ratio mortgage option will most often be offered by a bank and insured by CMHC.

We mentioned the fact that if residential mortgage insurance with CMHC is declined, the bank will not be able to finance your mortgage. When you apply for a mortgage, the bank will submit an application for high ratio mortgage to CMHC.

CMHC has firm lending guidelines and requirements that include that the applicant has good credit, good stability, and verifiable income. CMHC will insure a high ratio mortgage when the applicant has had a past history of bruised credit, provided they have at least two years of strong, re-established credit.

If you own your home and want to refinance, CMHC will high ratio insure a residential mortgage and refinance up to 90% of the property’s value, if the applicant qualifies. In the case of a refinance, this makes obtaining a mortgage much easier because where CMHC insurance is present; banks will often not require an appraisal of the property at an additional expense to the borrower.

CMHC’s residential mortgage insurance premium can range from .5% up to 4.5% depending on how much insurance is required. When the residential mortgage being insured represents a lower loan to value, the CMHC insurance premium is less, and when it represents a higher loan to value, the CMHC residential insurance premium is higher. CMHC high ratio mortgage insurance is added to the mortgage and blended into your monthly mortgage payments.

For more information about residential mortgage insurance with CMHC and when it is required to obtain a high ratio mortgage please contact Paul Mangion at GTA Mortgage Matters by calling 1 (877) 234-8275 or by visiting http://www.gtamortgagematters.com/

How to Shop for a Mortgage in Toronto without Ruining Your Credit

The biggest mistakes that individuals make when shopping for a mortgage are over shopping and under planning. Here are some tips on how to shop for a mortgage in Toronto, without ruining your credit.

Before you start looking for a mortgage, you should first think about if you qualify for a mortgage. This starts with requesting your credit report from Equifax. Your credit score is important because if it is less than 680, your mortgage options will be greatly reduced.

If you want to shop for a mortgage and have less than a 25% down payment, you will need CMHC mortgage insurance to qualify for a mortgage with a bank. When a mortgage is insured by CMHC, the applicant must apply with both the bank and with the CMHC. Usually the bank will submit your CMHC insurance application to them on your behalf.

Both the CMHC and the bank will require the following:

1. That your housing payments (with your new mortgage) do not exceed 32% of your gross income.

2. That your housing payments (with your new mortgage payment) and your payments to credit/debt do not exceed 42% of your gross income.

3. They will want to see good stability.

4. They will want to see proof of your income.

5. Most banks will require a minimum credit score of 680. However, the CMHC will often insure a high ratio mortgage when the applicants credit score is as low as 620.

If you do not satisfy the above basic criteria, you still have mortgage options in Ontario. Because the CMHC will insure a high ratio mortgage for someone who doesn’t meet the banks minimum criteria, there are a number of credit unions and trust companies that offer more flexible lending criteria.

The planning part of preparing to purchase a home should include reviewing your personal finances and credit to ensure you can obtain financing. There is nothing worse than falling in love with a home you want to purchase, only to learn you cannot get a large enough mortgage to make the purchase.

When the time comes to obtain a mortgage pre-approval, do not go from bank to bank applying for mortgages trying to get the best deal. Many folks don’t realize that each applicant for credit is reported to the credit report and too many applications for credit in a short period of time can actually reduce your credit score.

Your best bet is to establish a relationship with a local Mortgage Broker, one who deals with all the banks. If you are worried that you may face challenges qualifying for the mortgage that you want, when looking for a Mortgage Broker, ask them if they are capable of dealing with all types of credit and income. In most cases, the bank will pay your Mortgage Broker, so there is huge value to taking advantage of a resource that can shop the best deal for you. For more information about how to shop for a mortgage in Toronto without ruining your credit visit http://www.gtamortgagematters.com/

Low Interest Mortgage Loans – How Long Can You Hold Your Low Interest Mortgage Approval?

Low interest mortgage loans are available to those who want to purchase or refinance their homes.

If you are thinking about buying a home, it makes the most sense to make sure you can obtain a mortgage before you start house shopping. You will also want to be sure that you understand the extent of your mortgage closing costs to ensure that you have the liquidity to go through with the purchase.

Do not go from bank to bank applying for mortgages. This will result in multiple credit inquiries on your credit report and will reduce your overall credit score. This alone could disable your ability to get approved for a mortgage.

Go to a Mortgage Broker, one that deals with all the major banks. They will be able to:

- Pull your credit

- Review your credit applications

- Tell you what you qualify for

- Negotiate with the banks

- Obtain a low interest mortgage pre-approval on your behalf

Most Mortgage Brokers can negotiate with the bank to hold your mortgage interest rate for 120 days.

Depending on your credit and income, you will need between five to ten percent of the purchase price as a down payment. If you are obtaining a CMHC mortgage, you will have to prove where your down payment money came from.

If you are planning to purchase a home, you will also need to consider the following “other closing costs” you will incur when purchasing a home.

1. It is always prudent to have a property inspector go in and do a home inspection on a property you are planning on purchasing. The cost of an inspection is approximately one thousand dollars.

2. You will have to obtain Fire Insurance Coverage on the property. This is often cheapest when bundled with other insurance policies, such as car insurance.

3. Real estate legal fees will be incurred both on your property purchase and on your mortgage closing. Many Real Estate Lawyers can offer you a bundle deal that covers both closings.

4. Finally, you will need to have enough money set aside to cover your land transfer tax which could be 1-3% of the property purchase value.

Your closing costs will vary depending on the location of the property you are purchasing. Step one in the process of planning to purchase a home is to establish a relationship with a good Mortgage Broker. For more information about low interest mortgage loans and how long you can hold your low interest mortgage approval visit http://www.gtamortgagematters.com/

Canadian Mortgage Interest Rates, Going Up or Down?

It appears as though there is constant speculation as to whether Canadian interest rates will go up or down. Interest rates have been low for so long and many consumers have been taking advantage of low interest variable rate mortgages.

Canadian interest rates were originally reduced to historic lows after the attacks on the World Trade Centre in 2001. Into the mid 2000’s, the Bank of Canada began to inch interest rates upwards, but the recession that began in 2008 forced the Bank of Canada to bring the national lending rate back down.

They have remained low for the past 3 years, however in the past the Bank of Canada has raised interest rates 3 times.

When the Bank of Canada begins inching up interest rates, those who have variable rate mortgages begin to question whether or not it might be time to lock in.

A variable rate mortgage is one that floats with prime. If interest rates go up, so will the interest rate on a variable rate mortgage and in accordance so will the monthly mortgage payments. Many folks who have low interest variable rate mortgages will closely monitor the Bank of Canada’s announcements. This is because many variable rate mortgage products carry an option to lock-in.

This is one reason why we often write about the topic of whether or not Canadian interest rates will stay low or go up.

If you want to determine whether or not interest rates may go up, rather than paying attention to the Bank of Canada, pay attention to the strength of the Canadian dollar. A large part of Canada’s economy and Ontario’s economy is tied to the manufacturing sector. We export a lot of products. However, when our dollar is strong it makes it more expensive for other countries to trade with us.

Compared to the currency from other countries we currently have a strong Canadian dollar, and this is due to Canada’s strong bank system. Economic instability in countries around the world will only continue to strengthen our dollar. While Standard and Poor's recently announced that it was downgrading the U.S.’s world credit score from AAA to AA, it has been announced that Canada will continue to maintain its AAA world credit score status. This is yet another indicator that our dollar will continue to soar.

Unfortunately this also means that we could lose a lot of jobs in the Canadian and Ontario manufacturing sectors. This reason alone may be one reason that the Bank of Canada decides to leave interest rates where they are (as they did in their most recent interest rate announcements) or even lower it. There are other economic indicators that the Canadian mortgage interest rates will continue to stay low, therefore now is a better time than ever to take advantage of a low interest variable rate mortgage.


For more information about Canadian mortgage interest rates please visit http://www.gtamortgagematters.com/

Ontario Mortgage Rates - Part 5 --- What is a fixed mortgage rate?

In Ontario, a fixed mortgage rate is a mortgage where the interest rate stays the same for the term of the mortgage loan.

A fixed rate mortgage is a safe option because you know that your mortgage payment will not change during the term of the mortgage. Families who live on a tight budget are better suited to a fixed term mortgage as it ensures that there are no surprises.

A fixed rate mortgage usually bears a slightly higher interest rate then a variable rate mortgage. The interest rate is fixed based on the term of the mortgage so the shorter the term, the lower the interest rate.

Banks and other major financial institutions generally want customers to lock into a 5 year fixed rate mortgage because it yields them the most interest and it is locked in, so they know that the customer is theirs for at least 5 years.

Now as I mentioned, it all depends on you, your budget and your lifestyle. If you are living on a tight budget, don’t plan on moving for the next 5 years and want to guarantee your mortgage and interest rate, a fixed rate mortgage is right for you.

On the other hand if you have lots of surplus cash flow in your budget, low debt and want to pay off your home fast, opt for a variable rate mortgage which generally carries a lower interest but also comes with the risk that if mortgage rates go up, yours will too!

Whether you chose a fixed rate mortgage or a variable rate mortgage, if you want to pay off your mortgage quickly, outside of choosing the type of interest, you can also do other things to speed up the process of paying down your mortgage.

You don’t have to choose a 30 year amortization. Did you know that reducing your mortgage amortization by 5 years will only increase your mortgage payment slightly but will save you 10‘s of thousands in interest?

Also consider accelerated mortgage payments as another way to pay more to your mortgage principal.

When planning for a mortgage, always consider the benefits and risks to the mortgage products you are considering so that you make the most informed choice. It's not always about the lowest Ontario mortgage rates. It's also important that you commit to a mortgage you can afford to repay, at terms you can live with. For more information about fixed rate mortgages please visit http://www.gtamortgagematters.com/

Ontario Mortgage Rates - Part 4 --- How to Get Approved for a Mortgage at the Lowest Mortgage Interest Rate

If you are looking to purchase a home you must be thinking about how to get approved for a mortgage at the lowest possible mortgage interest rate. Different lending institutions offer different mortgage interest rates to applicants based on the risk that they represent as a potential client.

Usually financial institutions that offer CMHC mortgage insurance offer the lowest interest rates. That is because if your mortgage is CMHC insured and you default, CMHC will pay the bank for any shortfall. That’s not to say that CMHC won’t try to collect the money back from you in the future.

This means that if you want to get approved for a CMHC insured low interest mortgage you will have to satisfy CMHC’s requirements as well as the banks. Both CMHC and the bank have common criteria.

1. You must be able to prove your income.

2. You must demonstrate stability.

3. Your income to debt service ratios must be in line.

4. You must have the minimum required down payment.

5. You must meet their credit score requirements.

Generally a financial institution will want to see that you have had the same income source for the past 3 years. They will sometimes request your tax assessments as evidence. If you are employed they may ask for a job letter and paystub.

Your debt service ratios consist of two numbers, your GDS and TDS. Your TDS is your “total debt service ratio” This is the amount of your monthly income that is consumed by your housing payments and payments to debt divided into your gross monthly income expressed as a percentage. CMHC and most lenders will require that your TDS does not exceed 42% (with your new mortgage).

Your GDS is your “gross debt service ratio” which is the amount of your monthly income that is consumed by your housing payments alone, against your gross monthly income, expressed as a percentage. CMHC and most lenders will require that your GDS does not exceed 32% (with your new mortgage).

You must be able to prove that you have the required down payment or if you are refinancing, that you have the sufficient equity.

Finally, the minimum credit score required to be approved for a mortgage at a bank is 680. Set that as your benchmark if you want to get approved for Ontario’s lowest mortgage interest rate. For more information about how to get approved for a mortgage at the lowest mortgage interest rate please visit http://www.gtamortgagematters.com/

Ontario Mortgage Rates - Part 3 --- When are mortgage rates going up?

When are mortgage rates going up? This seems to be the question on everyone’s mind, especially those with variable rate mortgages.

Ontario mortgage rates change depending on the state of the economy. Interest rates can be affected by the local, national and global economies. The Bank of Canada sets the lending rates for Canada and then financial institutions calculate their interest rates based on that.

When unemployment rates are high and the economy is struggling interest rates will be lower. When the economy is stable and growing Ontario mortgage interest rates will go up.

There have been reports that the economy in Canada has been improving, however we still have a huge manufacturing sector. So as our dollar increases, the currency exchange rates make manufacturing products here less affordable.

When you boil it down, a stronger Canadian Dollar is a bad thing for Canada’s manufacturing sector. Add to it other financial turmoil, for example If Greece fails, and the end result will be an even stronger Canadian Dollar. On top of that, if the United States doesn’t get their finances in order, the Canadian Dollar will see a further surge upward.

Sometimes the Bank of Canada can raise their interest rates 2 or even 3 times and you may hear that the economy is improving but that doesn’t always mean that interest rates are going to go up. In fact we think that they are going to stay the same, or even go back down depending on what happens with Greece.

The good news is, the time is right to seize the day while Ontario mortgage rates are still at historic lows. Not only is it more affordable than ever to purchase a home, if you already own one, there are lots of ways that you can still take advantage of these low Ontario mortgage rates.

You can obtain a home equity loan to consolidate debt and work towards becoming completely debt free. You could complete a long overdue home renovation or purchase a vehicle. The sky is the limit. If you were planning a big ticket purchase your home is a great way to raise money to finance it at low interest rates.

It’s hard to predict when Ontario mortgage rates are going to go up so the best thing to do is obtain the right mortgage that works within your budget, so that if mortgage rates do go up, you are prepared. For more information about when Ontario mortgage interest rates are going up please visit http://www.gtamortgagematters.com/

Ontario Mortgage Rates - Part 2 --- When to lock into a fixed rate mortgage

When to lock-in to a fixed rate mortgage is a tough decision that should be thought through. An individual’s housing payment is usually the largest monthly payment in their budget.

Ontario Mortgage rates have been low for a long time so those who have chosen variable rate mortgages have enjoyed less mortgage interest than their counterparts, who selected the safer, fixed rate mortgage option.

Variable mortgage rates are great when interest rates are low. The difficulty occurs if mortgage rates go up. For example, a family who is living paycheque to paycheque should not have a variable rate mortgage.

Fixed rate mortgages have slightly higher interest rates but because the interest is fixed, so is the monthly mortgage payment. Families who have fixed rate mortgages do not have to worry that if interest rates increase so will their mortgage payment.

People choose variable rate mortgages because the rates are lower, low Ontario Mortgage Rates means lower monthly payments and more repayment to mortgage principal.

Variable rate mortgages fluctuate with the Bank of Canada’s lending rate. The Bank of Canada adjusts its lending rate according to the state of the economy. They consider not only the national economy but also the world economy.

For example, some have speculated that because the Canadian economy is doing better that interest rates will continue to rise (the Bank of Canada has raised its lending rate 3 times in the past year).

It is true that in Canada the economy has seen some improvement. However, this doesn’t mean that rates will continue to go up. In fact many believe that they will stay the same or perhaps they may even go down.

Many experts, including us, believe that in fact they will stay the same or even go down. With continued instability in countries such as Greece and the United States (debt talks), the Canadian Dollar will only continue to strengthen. This will hurt our manufacturing sector and local economy simply because no one wants to manufacture here when the exchange rate is so high. This in turn will result in The Bank of Canada leaving their lending rate as is or perhaps even reducing it in the near future.

The best way to try to predict when to lock into a fixed rate mortgage is to do lots of research and stay on top to the news. Establish a relationship with a mortgage broker who can let you know what you may expect with respect to Ontario Mortgage Rates and how to react. For more information please visit http://www.gtamortgagematters.com/

Ontario Mortgage Rates - Part 1 --- What is a Variable Rate Mortgage?

Trying to find the lowest Ontario mortgage interest rates? Whether you are looking to purchase a home or refinance it, the interest rate on your mortgage is important. Your mortgage interest rate will dictate how much interest you pay during your mortgage term and how much your mortgage payments will be.

There are two main types of mortgage interest rates in Ontario – fixed and variable rate mortgages. This article is about variable rate mortgages.

An Ontario variable interest rate mortgage is a mortgage where the rate is periodically adjusted to float with the Bank of Canada lending rate. Variable rate mortgages are also referred to as adjustable-rate mortgages.

If the Bank of Canada raises its lending rate, the financial institutions will adjust the interest rates of their variable rate mortgage customers accordingly.

When the Bank of Canada’s lending rate is low, Ontario Mortgage Rates are low. Variable rate mortgages carry risk because if the Bank of Canada’s lending rate increases, so does their mortgage rate and thus so does the monthly payment.

The reason individuals take the risk and choose variable rate mortgages is because variable rate mortgages are lower interest than fixed mortgages. Less interest means more of your monthly payments go to principal and your monthly payments would be less.

You can negotiate a variable rate mortgage that carries a provision that enables you to lock in your mortgage at any time. This way you can test out the waters with your variable rate mortgage while Ontario mortgage interest rates are low and then lock-in your mortgage rate if you think interest rates are going to increase.

Variable rate mortgages are best suited for those who have an aggressive goal of paying down their mortgage. This would be an individual with a lot of cash flow, one who is prepared to make more than their minimum mortgage payment each month.

Someone who is running a tight budget is not suited for a variable rate mortgage. The individual’s mortgage payment would increase in accordance with an increase in the mortgage rate so if their budget was tight to begin with, it could cause a major financial problem.

If you want to have the best Ontario mortgage rates, it pays to have a relationship with a good mortgage broker, one who works with all the banks, watching lending rates and ensuring that you always have the right mortgage and the best deal. To find out more about Ontario mortgage rates and variable rate mortgages please visit http://www.gtamortgagematters.com/

Pay Your Tax Debt Using Home Equity and Move On

Being in debt to the Canada Revenue Agency can be paralyzing. The very thought of facing aggressive CRA agents is terrifying.

If you owe money to the CRA it will not go away by itself. Also in many cases, taxpayers who have been assessed with a tax debt, become fearful to file future returns. Even if you have not yet filed returns to the CRA, they can notionally assess you and make an arbitrary determination of your earnings based on whatever records they have on file.

If the CRA believes you owe them money, they will come after you. Interest and penalties will accrue at an alarming rate and your tax debt could grow in size by 200-300 percent.

If you own your home, you stand to lose the most. The CRA can attach a lien to your home which could cause a number of problems;

- The bank could call in your mortgage or refuse to renew your mortgage.

- When the amount of the lien exceeds the equity in your home, it makes it impossible to sell or refinance to deal with the tax debt.

- The CRA could force you into power of sale.

Before a lien is registered a homeowner has more options;

- If the amount of the debt exceeds the amount of equity available in the home, the homeowner could refinance the home. At which point they could use whatever equity is available to bargain with the CRA and offer a lump sum payment along with a monthly repayment plan.

- If the amount of equity does not exceed the available equity in the home and there is no lien present, the homeowner has many options. A seasoned mortgage broker could arrange a new first mortgage or a second mortgage to pay off the tax debt.

- If the amount of equity does not exceed the available equity but a tax lien is registered on the home, this represents a more delicate situation. Even if the tax debt is being paid in full some banks will cringe at the mere existence of a tax debt. There are however many major financial institutions that will gladly offer low interest mortgage financing to a homeowner who has a tax debt provided the tax debt is being paid in full.

At the end of the day trying to ignore a tax problem is an expensive proposition and will cost you way more in the long run. Your best course of action is to hire someone who is capable of dealing with the CRA on your behalf. If you are a homeowner there are many mortgage brokers who represent all major financial institutions and specialize in working with homeowners who have tax debt.

If you have no assets and have obtained large tax debts there are also financial professionals who can advise you on debt relief options so that you can move on from your tax debt. For more information about paying your tax debt using home equity please visit http://www.gtamortgagematters.com/

Power of Sale in Toronto – Why Do They Happen?

Many people think about Power of Sale and associate it as a consequence to a person who defaults on their mortgage payment. Defaulting on mortgage payments is just one of many things that can trigger a power of sale.

Every mortgage has “standard charge terms”. These are terms that apply to all of the institution’s mortgages. If any of these terms are breached the financial institution could demand to be paid in full. If you can’t pay off the mortgage then the mortgage lender could put you into power of sale.

Here some common standard charge terms that don’t relate with not making your mortgage payments yet financial institutions take very seriously.

1. You must keep your property taxes up to date. Failing to do so could change the banks secured position on title. If they learn that your property taxes are in arrears, they may pay them on your behalf at which point they will demand payment in full from you, or call in your mortgage. If the bank pays your property taxes on your behalf or there is a property lien that has to be removed, you could be subject to administrative fees and legal fees in addition to the property tax arrears and interest.

2. You must maintain valid fire insurance on the property with the bank listed as the loss payee on the policy. Failing to do so is serious because it puts the bank at serious risk to lose their security if there is a fire in your home. If you allow your fire insurance to lapse, the insurance company will inevitably notify your bank. Obtaining fire insurance after a previous policy has lapsed can be expensive – especially if the policy was cancelled for non-payment.

3. You must occupy the residence as your principal residence. Tenants have different rights than homeowners. Lenders will often not extend high ratio mortgage financing on rental properties because the process of evicting tenants is long, expensive and complicated.

4. You cannot perform construction or major renovations on the property without consent from the bank. Many folks start renovations and then run out of money, thereby depreciating the value of the bank’s asset.

Most of these issues, like defaulting on mortgage payments, occur because individuals run into financial problems and simply can’t make ends meet. The ironic thing is that your home may be the answer to these problems. Refinancing your mortgage or obtaining a second mortgage could give you the financial relief and flexibility to clear up financial issues and start you back on a fresh, firm, financial footing.

Unfortunately, powers of sales in Toronto are all too common despite being easily avoided. If you are at risk of your home going into power of sale visit http://www.gtamortgagematters.com/

Taxpayer Relief is Not the Fastest Way to Solve Your Tax Problem

If you have a tax debt that has interest and penalties assessed and you have a serious medical problem, suffer from financial hardship, have been the victim of a disaster or you can prove that the CRA (Canada Revenue Agency) has made an error, you can make an application for Interest and Penalty Relief to the CRA.

This is a long process and a large percentage of these applications end up being declined. This is usually the case because taxpayers make the applications themselves and do not provide the sufficient evidence needed to prove their claims.

Even if a taxpayer has been accepted for taxpayer relief it could take 1-2 years before a decision is made. In the meantime, interest will continue to accrue and if (like in many cases) it is not accepted – you will have to pay the extra interest and will face aggressive collection action.

Homeowners have even more to worry about because once a property tax lien is applied the CRA will notify mortgagors, such as the bank. This will raise awareness of the tax dispute/issue and the outcome of this could be long-term destruction to your relationship with your bank.

If you own your home and have a tax dispute, tax debt or believe you may qualify for taxpayer relief, we recommended using your home as a tool to satisfy the CRA, then pursing your dispute.

Refinancing your home to pay off your tax debt will result in much less interest than the interest charged by the CRA. Using a mortgage as a tool to pay your tax debt can enable you to pay off large debt with very little impact to your budget/monthly payments.

Most banks will shy away from working with a customer who has a large tax debt - even if you are borrowing the money from them to pay the debt in full. The mere existence of a tax debt will lead to many banks flagging you as a high risk.

There are however many Credit Unions, Trust Companies, Mortgage Investment Corporations and even private lenders who will extend mortgage financing to individuals who have a large tax debt even if there is a lien on their property.

There are many mortgage solutions for taxpayers, who are in need of refinancing, to deal with tax debt. These include first mortgage refinancing, second mortgages and home equity lines of credit. A good mortgage broker will be able to access all funding sources and products so that you can see all of the options that exist. Also a mortgage broker can be trusted with all of your financial information without rendering judgment or damaging your banking relationships.

The fastest way to deal with a tax debt is to pay it off. If there is an underlying dispute or you want to apply for penalty relief – if it is granted the CRA will pay you the money. You can apply it to your mortgage as a lump sum payment to principal. For more information about the fastest way to solve your tax problem please visit http://www.gtamortgagematters.com/

Property Tax Assessments and Property Tax Arrears

Property tax assessments are important because they determine the value that will be used by the municipality when calculating your annual property taxes.

Property taxes are one of the few debts that take priority on a property. What does this mean? If you were to default on your mortgage payment with property tax arrears, the property tax arrears must be paid otherwise property ownership could be transferred to the Queen. If a lender were to take possession of a property in the event of a mortgage default, they would not be able to sell it without first paying the property taxes.

It is for this reason that many lenders will collect your property taxes in conjunction with your mortgage payment each month and remit your property taxes on your behalf.

Most mortgages contain standard charge terms. These terms require that the borrower keep their property taxes up to date. If you have property tax arrears, your bank could do one of several things, these include:

1. Sending you a notice demanding that you pay your property tax arrears

2. Paying the property taxes on your behalf and then demanding payment in full

3. Calling in your mortgage and demanding to be paid off – in extreme cases

Property tax arrears can cause a snowball effect. Missing even one year of payments can cause thousands of dollars of debt to accumulate. You cannot go bankrupt on property tax debt because it carries with the land. If you have property tax arrears, the faster you deal with the issue, the better. Ignoring the problem will only cost you more in the long run because you will pay interest on the debt and if they file a lien on your property, you will have to hire professional help to get it removed.

Here are some helpful tips for dealing with property tax arrears.

1. Consider the big picture. If you owe too much in property tax arrears to pay off and/or you have other debt, a consolidation may be the best choice.

2. You can consolidate debt through obtaining a loan or mortgage. Refinancing your mortgage to consolidate debt is an effective solution because the interest rate will usually be low, giving you lots of flexibility when setting the amount of your monthly payment.

3. Do not walk in to your bank and ask for a loan to pay property tax arrears. Although well intentioned, this could disrupt your relationship with your bank. Pursue a relationship with a licensed mortgage broker where you can openly discuss the issues. A mortgage broker can recommend transparent solutions with financial institutions that will be open to helping you resolve your situation.

4. If you refinance your mortgage, ask that the lender collect your property taxes with your payment so that you don’t have to worry about it again in the future.

For more information about property tax assessments and property tax arrears please visit http://www.gtamortgagematters.com/

Equity Mortgage Home Equity Loans Are Based on Your Home Equity

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/

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/

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/