How to Stop Foreclosure Beginning with Dealing with Mortgage Arrears

Are you finding yourself struggling with your monthly bills? Are you worried that there is a chance that you may fall behind or default on your mortgage payments? Do not ignore these concerns. Dealing with mortgage arrears and learning how to stop foreclosure before it happens is very important. 

There are ways to stop foreclosure and deal with mortgage arrears before they happen. To avoid losing your home through foreclosure due to defaulted mortgage payments, it is crucial to devise a plan to get your finances back on track. There are several options available to you, but some are definitely better than others!

When you are threatened with the fact that you may be unable to pay your monthly bills and mortgage arrears and foreclosure are looming overhead, it is first essential to examine why? The high cost of living coupled with high credit card or personal debt can be detrimental. A great way to fix this is to decrease your debt. But how can this be achieved?

Currently there are countless companies out there offering ways for you to reduce the amount of debt you owe or reduce your monthly debt payments. However, these usually come in the form of debt consolidation loans and consumer proposal plans that, although disguised to help you, actually carry with them devastating impacts for your credit. Avoiding them at all costs is a really good idea.

Instead, working with your mortgage broker to stop foreclosure and avoid mortgage arrears is much more effective. By using the equity in your home and taking on a second mortgage, you can pay off your debt and avoid foreclosure by making your monthly payments more manageable. This option will help you keep your credit in check and ultimately saves you thousands in interest versus trying to continue the monthly payments that were bogging you down in the first place!

What if you have already gone into arrears on your mortgage? Your options may be greatly reduced. Often creditors are less willing to approve applications for funds if mortgage payments are in arrears. Since most lenders will only offer financing if your mortgage payments have been made in full, your only choices may rest with equity only financing. This means that lenders use the equity in your home – and this means that you will need to have a bit more equity established in order to qualify.

Working with your mortgage broker once your mortgage payments are in arrears is a must in order to stop foreclosure.  They will be able to help you develop strategies to firstly, pay off the existing payments owed, and secondly to build a financial budget to allow you to maintain your current bills. This will help you stop foreclosure and avoid going into arrears on your mortgage in the future.

If you find yourself facing mortgage arrears and the potential foreclosure of your home and want more information about how to stop it and bring your mortgage payments back in check, please contact Paul  Mangion at The Mortgage Centre by calling 416 204 0156 or visit www.themortgagecentretoronto.com

Property Tax in Canada and What to Do If You Have a Property Tax Lien on Your Home

Have you found yourself in the uncomfortable position of having a property tax lien placed on your home because you have been unable to pay your property tax? Are you asking yourself what to do if you have a property tax lien on your home? This can be an inconvenient occurrence, but it is not the end of the world.

Property tax in Canada is a mandatory requirement, and there are consequences to be faced if you default on your taxes. One of these consequences is a property lien on your home.

So what is a lien? A lien is a claim on an item of your property (in this case, your house) that assures the settlement of a debt. What is a property tax lien? A property tax lien is a claim on your home that ensures payment of the debts owed to the Canada Revenue Agency (CRA) for unpaid property taxes.

What does this mean? It usually means that the balance owed becomes a forced payment that comes before any other – even your mortgage. This can be detrimental as it can impact your ability to pay other bills, thus damaging your credit score. Additionally, a property usually cannot be sold, and banks typically refuse to refinance a property, if there is a lien on it, therefore impacting your ability to sell your home or refinance your mortgage.

So what do you do if you have a property tax lien on your home? The best way to solve the problem of having a property tax lien on your home is to pay off the outstanding debt. This may seem difficult, but there are options.

The best option is to refinance your first mortgage or take out a second mortgage through your local mortgage broker. This will allow you to use the equity in your home to pay off the property tax lien, in turn saving you the interest you would have been forced to pay had you just continued to pay the monthly lien payments. A longer amortization period often means that your monthly payment increase is minimal and therefore your ability to pay is increased.

Sometimes your mortgage broker will voluntarily pay the off the lien, meaning you are then required to pay them back. This may seem like a great option, however, this could result in your house being put up for power of sale if you default on your payments to the mortgage broker. This option is probably best avoided.

Another seemingly viable option is to apply for a credit line or loan to eliminate the debt and get rid of the property lien. Again, this may just cause more problems as it is just another monthly payment for you to struggle with.

Want to avoid going into arrears on your property taxes in the future? A good way to do this is to get your mortgage broker to roll your property taxes in with your mortgage. Having one monthly payment may be much more manageable, and your property taxes will not default – thereby avoiding a property tax lien.

For more information about property tax liens and what to do if you have a property tax lien on your home, please contact Paul Mangion at The Mortgage Centre by calling 416 204 1256 or visit www.themortgagecentretoronto.com

Should I Refinance? Blog Series Part 3 – Refinancing Your Mortgage to Consolidate Debt

Are you a homeowner with substantial debts? Have you asked yourself “should I refinance” and use that money to pay off my debt? Refinancing your mortgage to consolidate debt might be a good solution and could save you a lot of money.  

Paying credit card debt by refinancing your mortgage means that you are accessing the equity in your home – using the value of your home – to borrow against. This can mean that a substantial amount of money is available for you to use to pay off your debt. So what are the benefits of doing this? 

Firstly, say for example you owe 40 000 in credit card debt. All cards have minimum monthly payments that you are required to make – but these do not in their entirety go onto your outstanding balance. Monthly payments are usually made up of interest and payment on the balance, however, the majority of this goes to interest, meaning that you are actually only putting a tiny amount onto the outstanding debt. That 40 000 dollars can take way too long to pay off!! Since credit card interest is often very high, refinancing your mortgage to consolidate debt allows you to save a lot of that interest.

Secondly, refinancing your mortgage to consolidate debt allows you to lower you monthly payments considerably in order to avoid the accumulation of more debt. If you are struggling to make the minimum payments, chances are your debt isn’t actually decreasing at all, and you may just be increasing it through continued use. By consolidating your debt you are able to reduce your monthly debt payment and take control of your financial situation. Furthermore, since your required monthly payment is lower, you will have extra monthly cash flow and when able, can just pay more directly to the balance owed.

Another good reason to refinance your mortgage to consolidate your debt is to improve your credit. Even if you make the minimum required payment on each of your credit cards, having several cards with high balances can negatively impact your credit rating. High balances make it seem as though you are unable to manage your finances in relation to your monthly income, and therefore you may seem like a high risk investment. By refinancing your mortgage and using the value of your home to pay off debt, you can fix this problem.

Banks versus a mortgage broker – which option is best? Since this is a financial issue, your first thought might be to go to the bank and try to get a consolidation loan. However, as a homeowner, there are far better options available to you. Since banks are often the financial institutions that control your credit cards, it is in their best interest to keep you paying the minimum monthly payment (much of which is just interest). It means way more money for them if you just continue to pay interest. Banks are also often much stricter when determining who qualifies for a loan, and so going to a mortgage broker means a better chance of getting the money you need to get those debts under control.

There are many things to consider when asking yourself “should I refinance.” Refinancing your mortgage to consolidate debt can be an important solution to getting control of your debt and saving money.

 For more information about what your answer to the question “should I refinance” might be, and how refinancing to consolidate debt can work for you, please contact Paul Mangion at 416-204-0156 or visit www.themortgagecentretoronto.com

Should I Refinance? Blog Series Part 2 - What is a Second Mortgage or a Second Mortgage Loan?

Are you thinking of paying off some of your debt, or need some money for major renovations or other financial needs? Are you asking yourself “should I refinance?” Well a second mortgage might be the best option for you.

Firstly, what is a second mortgage? A second mortgage, also known as a second mortgage loan, is a home equity loan that lets you borrow from your home’s equity while avoiding refinancing your first mortgage. This is important because a second mortgage lets you continue payments on your existing mortgage uninterrupted, allowing you to pay off your debt quicker, ultimately saving you interest.

Because a second mortgage is based on your home equity, the amount is based on the difference between the appraised value of your home and the amount still owing on your first mortgage. This can be a significant amount of money, and refinancing by taking out a second mortgage can be a good option for getting some much needed capital.

So what are the benefits of a second mortgage? Often, second mortgages can be important sources of income, and a lot of income. Because it is based on the value of your home, it is easy to access thousands of dollars.  An easy way to estimate the amount you might qualify for is to have an appraisal done on your home – which will be necessary once you apply.

What can they be used for? Really anything. Paying off debt is one of the most common usages of a second mortgage loan. Because the interest rate on a second mortgage loan is often far lower than a credit card, paying one off with the other can ultimately save you thousands of dollars in interest. 

Using a second mortgage to pay for a child’s tuition is also common. Chances are you have built up substantial equity in your home by the time your child goes off to college or university, and so a second mortgage can prove to be a sure-fire way to secure funding for this. For the same reason, obtaining a second mortgage loan to pay for home improvements or to open a small business is an important consideration when asking “should I refinance.”

Why not just refinance by adjusting your first mortgage? This can be an option, but often the interruption can mean a longer amortization period resulting in more interest being paid by you in the long run.  This is where a mortgage broker comes in. Let them go through all of the options available to secure the best mortgage product to suit your current financial needs and goals.

As a homeowner, you have worked hard to make a dent in your existing mortgage and have thus created equity. This home equity can be an important source of income when it comes to a second mortgage loan. 

For more information about what your answer to the question “should I refinance” might be, and what a second mortgage is, please contact Paul Mangion at 416-204-0156 or visit www.themortgagecentretoronto.com  

Should I Refinance? Blog Series Part 1 – How to Get the Lowest Mortgage Rates

With interest rates currently very low in Canada, refinancing to get the lowest mortgage rate may seem like the best idea to save yourself some money. The benefits from refinancing your mortgage can range from getting a better, lower interest rate, to shortening the length of the loan period. However, when asking yourself “should I refinance,” there are several different things that need to be considered, not just the rate of interest, to ensure that you are getting the lowest mortgage rates! 

There are many different reasons that refinancing your mortgage may be a good idea, and a lower interest rate is not necessarily the best one. Switching from a variable rate to a fixed rate mortgage or adjusting the length of your mortgage term are two important examples. These can significantly impact your mortgage interest rate.

Should you refinance? Of course, a lower interest rate can mean the lowest mortgage rate for you. Obviously, if your rate is significantly higher than those now being offered, it may save you thousands to refinance based solely on the current interest rates.

Has your credit improved significantly since you first got your mortgage? If it has, you may find that refinancing your mortgage is a good way to secure the lowest mortgage rate possible. Chances are, if your credit was not the best that it could have been when you were first approved, you are currently paying a higher rate of interest. Coupled with a lower interest rate, refinancing because of improved credit can definitely mean getting the lowest mortgage rates.

Switching from a variable rate to a fixed rate mortgage is a great way for people to get the lowest mortgage rates. If you currently have a variable rate mortgage, then your rate is not locked in, and once the interest rate goes up you will end up paying more. By switching to a fixed rate mortgage when interest rates are super low, you can ensure that you are getting the lowest mortgage rate. Taking advantage of low interest rates in this way can mean that refinancing will get you the lowest mortgage rate.

Shortening the amortization period of your mortgage can also significantly reduce your mortgage rates. For example, if the length of your loan is 30 years, you will pay a great deal more interest than if it was 25 or 20 years long. Even if you are getting the best possible interest rate, having a loan term of 30 years does not necessarily mean you are getting the lowest mortgage rates! If you have the financial ability to pay the higher monthly payment that accompanies a shorter amortization period, you can save yourself thousands in interest. In this case, the answer to the question ‘should I refinance’ might definitely be YES!

As you can see, just having the lowest interest rate does not necessarily mean that you are getting the best mortgage rate – especially when you are looking long term. You work hard for your money, and securing a mortgage that gets you the best mortgage rates can be achieved through mortgage refinancing.

For more information about what your answer to the question “should I refinance” might be, and how to get the lowest mortgage rates, please contact Paul Mangion at 416-204-0156 or visit www.themortgagecentretoronto.com.

Buying a Home in Toronto (G-T-A) Blog Series Part 4 – Best Canadian Mortgage Rates and Approvals

When you are setting out to buy a home in Toronto, there are many different things that need to be considered. One of the most important – arguably the most important – is your mortgage. Right now, interest rates are historically low, and so getting the best Canadian mortgage rate shouldn’t be a difficult task.

Getting a low interest rate on your mortgage is very important, as it can significantly reduce the amount of your monthly mortgage payment. Getting the best Canadian mortgage rate will allow you to get the most house for your money, while still allowing you to remain financially stable, even if other financial requirements should arise.

Prior to applying for a mortgage, it is essential to work out how much you can afford a month. This will ensure that you are prepared when seeking the best Canadian mortgage rate and buying a home. Making sure that you have factored in all monthly costs, such as house insurance, utilities, etc. will mean you know exactly how much you feel comfortable spending on a monthly mortgage payment.

When buying a house in Toronto and searching for the best mortgage rates in Canada, it helps knowing what different types of mortgages are available to you.  Which one you choose depends on various factors, such as the amount of down payment you have to put down or your future financial goals.

If you have 25% of the purchase price of the home or more to use as a down payment, you can apply for a conventional mortgage. If you have less that 25% but at least 5% however, you will need a high-ratio mortgage, which then has to be insured by CMHC. If you don’t have at least 5%, you have the option of applying for a no down payment mortgage, which allows you to buy a house even if you have not saved up the 5% down payment. However, be sure to keep in mind that this type of mortgage usually bears a higher rate of interest, and so getting the best Canadian mortgage rate means having a down payment.

What about an open mortgage compared to a closed mortgage option when looking for the best Canadian mortgage rates and buying a home. An open mortgage allows you to make additional payments on your monthly payment, or to pay off the entire mortgage, without any penalties. This means that if you have extra cash on hand, you do not need to worry about being charged additional fees when paying off your mortgage.

A closed mortgage (or fixed rate mortgage) is a mortgage that has an interest rate locked in for a set period of time – meaning that your rate does not change. It also means that you don’t plan on making additional payments as you would with an open mortgage. These are the most popular mortgages, as they are usually the ones that carry the best interest rates in Canada.

Knowing the different types of mortgages available to you when buying a home in Toronto and getting mortgage approval will help you to determine what you want to get from your mortgage.

For more information about buying a home in Toronto and getting the best Canadian mortgage rates available, please contact Paul Mangion by calling The Mortgage Centre at 416-204-0156 or visit www.themortgagecentretoronto.com

Buying a Home in Toronto (G-T-A) Blog Series Part 3 - Information for First Time Home Buyers

Buying your first home is a very exciting process, but it can also be a very overwhelming and stressful one. Help eliminate this stress and make buying a home in Toronto a smooth and trouble-free process by following these steps for first time home buyers:

Know how much you can afford and how much you qualify for before you even start looking.  Finding a house and falling in love with it before you know how much of a mortgage you can afford and qualify for can mean heartbreak – either for you or your pocket! Set out your monthly budget and figure out what an affordable, manageable monthly mortgage payment would be.

Now it is time to get the funds to buy a house. Find a mortgage broker so that you know that you are going to get the best mortgage at the lowest interest rate. A mortgage broker will work with the different banks in order to secure this for you! They will also explain the different types of mortgages available to first time home buyers, and the advantages of each.

Make sure that you have thought about – and saved – a down payment. “No down payment” mortgages are available, but in order to secure a low interest rate and to decrease the amount of your monthly mortgage payment, having a down payment is essential when buying a house. Look at the different options available to you in order to amass that down payment, including saving or the RRSP Home Buyers’ Plan, which allows first time home buyers to use up to $25000 tax free from your RRSP to purchase a home.

Secure the services of a real estate agent. These professionals will be able to help take the hassle out of buying a house that meets your needs/wants, and save you the time of having to wade through all of the real estate listings out there. Go to open houses and look at different properties, and always keep in mind that as a first time home buyer no house may seem perfect – but it may be the perfect house for you!

Know the costs associated with a real estate closing. A down payment and a mortgage are not the only costs associated with buying a home in Toronto. First time home buyers need to be aware of the various other fees that come with buying a house.  These other costs are important to remember:

-              Home Inspection – a home inspector will inspect the house to make sure that it is safe and to let you know of any repairs that are required.

-              Real Estate Lawyer – your real estate lawyer will go through all of the legal paperwork and make sure you understand your rights and responsibilities as a homeowner.

-              Land Transfer Tax – this tax is calculated based on the value of the property. There are substantial rebates on this for first time home buyers.

-              Home Insurance – required by the bank, this will protect your home and property from incidents such as fire or theft.

Buying a home – your first home – should be a very exciting experience. Just keep in mind that it is a complex process that involves some important steps that you cannot ignore. By using these easy tips to guide you in your home buying process, you can save yourself time, money and stress. Being a first time home buyer does not need to be intimidating – it should be fun – so just be prepared and take advantage of the services available to you to make it so!

For more information about what you need to know as a first time home buyer in Toronto, please contact Paul Mangion by calling The Mortgage Centre at 416-204-0156 or visit www.themortgagecentretoronto.com

Buying a Home in Toronto (G-T-A) Blog Series Part 2 - Estimating Real Estate Closing Costs

Buying a home can be a very exciting experience. However, it is important to keep in mind that there are certain real estate closing costs that you need to be aware of – and prepared for! Not knowing what other costs are associated with buying a house can be a major hassle – and may negatively impact your ability to close! Here is a list of the real estate closing costs you should be prepared for when buying a house in Toronto.

The first real estate closing cost you need is a down payment. Although there are “no down payment” mortgages available, these are often obtained at a higher interest rate, and therefore trying to save a down payment is a good idea. If you do not opt for, or cannot qualify for, a “no down payment” mortgage, you will be required to have at least 5% of the total cost of your home in the bank, and usually for 3 months, in order to secure a mortgage and buy a house. 

A second real estate closing cost that comes with buying a house in Toronto is the fee for a home inspection. Buying a house without a home inspection is a bad idea. Hiring a home inspector means that you are aware of any repairs that need to be done to the house and their expected costs.  Be sure to account for the inspection fees prior to buying a house in Toronto.

A third real estate closing cost that comes with buying a house is the legal fees charged by your real estate lawyer. A real estate lawyer is responsible for ensuring that all legal documentation is prepared and that you are protected in all contracts that you sign.  They also make sure that there are no issues, such as outstanding liens on the house, which can inhibit your ability to close. Being prepared for the costs of their services is essential!

Land transfer tax is a fourth real estate closing cost that you should be aware of. In Ontario, the cost of land transfer tax is:

-              Land/property under $55 000 = 0.5% of value

-              Land/property $55 000 - $250 000 = 1% of value

-              Land/property over $250 000 = 1.5% of value

-              Land/property over $400 000 = 2% of value

In Toronto, there is an additional land transfer tax, so be prepared for this as well.  However, new home buyers do get a substantial rebate on land transfer tax.

A fifth real estate closing cost is homeowners insurance. This insurance protects your home and property in the case of unforeseen incidents, such as fire or theft. It is usually paid on a monthly basis, but just be aware that acquiring homeowners insurance at the time of closing is a good idea, as it protects you the minute you take possession of your home! Be sure to shop around to find the best policy to suit your needs.

Being financially prepared for the costs associated with a real estate closing is very important. In order to make the home buying process a smooth and simple one, knowing your real estate closing costs is essential.  Make sure you know the costs associated with the home buying process when buying a house in Toronto and you will be able to find, buy, and close without any hassle or financial restraints!

For more information about buying a home in Toronto and the real estate closing costs you will need to be aware of, please contact Paul Mangion by calling The Mortgage Centre at 416-204-0156 or visit www.themortgagecentretoronto.com   

Buying a Home in Toronto (G-T-A) Blog Series Part 1 - The Toronto Real Estate Professionals You Will Need in Your Corner

Buying a home in the Greater Toronto Area? If so, there are many different things to consider throughout the process. Some of the most important are those people that will assist you in various areas: Real Estate Professionals!  This team of qualified individuals should include:

-              Realtor
-              Mortgage broker
-              Real estate lawyer
-              Home Inspector
-              Insurance Broker

All of these people will be necessary to you throughout the home buying process. So who are they and what role do they play in helping you buy a home in Toronto?

A realtor is the real estate professional that will help you find your dream home. Their job is to relieve you of the legwork necessary when trying to find that perfect property, pointing you in the right direction based on your predetermined list of wants/needs.  This means that you save yourself the hassle of combing through the available property listings. When you have found “your” house, the realtor will also work you through the negotiation process, allowing you to get the best deal on your new property!

A mortgage broker is the real estate professional who will help you secure a mortgage and at the best mortgage rate available in order to have the funds to buy a home. Your mortgage broker will discuss the different types of mortgages out there, and work with the different banks to obtain the greatest amount of money at the lowest interest rate possible.

A real estate lawyer is the real estate professional that will complete all of the necessary legal documentation required when buying a home. Your real estate lawyer will explain your rights and make sure that they are protected in any contracts you sign. They will make sure that there are no outstanding liens or debts against the house that can impact your ability to close.  They will also attend the closing of the home and make sure that you understand everything that has taken place.

A home inspector is the real estate professional that will make sure that the house you are planning to buy is safe to live in and that there will be no unexpected repairs necessary once you take possession of your new home. The home inspector will do a thorough inspection of the property to determine what needs to be fixed, and then you will be able to determine whether this will be fixed by the seller, if you would want to fix it yourself, or if you want to find a different house altogether. Making an offer without having a home inspection can have major consequences – and can mean great cost to you. This is easily avoided by having a home inspection done when buying a home in Toronto.

An insurance broker is the real estate professional that will make sure that your home and everything in it is protected. Homeowners insurance covers unexpected incidents such as fire, explosion, and theft, and allows you to rebuild or replace damaged items. Your insurance broker will work with you to find the best insurance policy that works for you. When buying a home in Toronto, securing homeowners insurance through an insurance broker is essential!

These five real estate professionals are very important when you are planning to buy a home in Toronto.  Making sure that you are properly covered and protected is the responsibility of all of these individuals, and buying a house without them is a bad idea! Before buying a home in Toronto, make sure you have assembled a team of real estate professionals in order to make the home buying process smooth and simple!

For more information about buying a home in Toronto and the real estate professionals you will need in your corner, please contact Paul Mangion by calling The Mortgage Centre at 416-204-0156 or visit www.themortgagecentretoronto.com