Category: My Blog

What is a holiday hangover? No, I’m not talking about New Year’s day waking up in the bathroom with the overwhelming smell of wine, champagne, and whiskey from a night of copious drinking with the feeling of weakness. A holiday hangover is the aftermath of the gifts, dinners, champagne, and traveling done on holidays which take a toll on your wallet causing a lot of people to fall behind on mortgage payments, car payments, and any other debts. Some symptoms of the holiday hangover are:

• Regret
• Stress
• Feeling of emptiness (in your wallet)
• Headaches
• Buyers’ remorse

Everyone can agree that racking up the bills and spending money is easy; however, that’s when the buyers’ remorse comes around – along with the credit card statements.

It can feel impossible to keep up with all of your bills when circumstances are tight. If you don’t make your monthly mortgage payments, though, you risk going into default and losing your home.

Such incidents are disastrous, but they can be avoided if you know what precautions to take. To safeguard your house and your finances, learn about mortgage defaults, what they entail, and how to avoid them.

What Does It Mean To Be In Default On A Mortgage?

A mortgage default occurs when a borrower fails to make monthly payments on a house loan’s principle or interest. Defaulting on credit cards and school loans, however, is possible. When a borrower skips payments or stops making them altogether, it can have major consequences in the short and long term.

A mortgage default can result in the loss of a borrower’s home as well as damage to their credit score. Defaulting on a loan might raise the borrower’s interest rate on other loans and make it difficult to qualify for a future loan in the long run.

What Causes A Mortgage Default?

Missing monthly payments is the most prevalent cause of home loan default, but it isn’t the only one. Homeowners can also fall behind on their payments if they:

They haven’t paid their property taxes in a long time.

They haven’t paid their homeowner’s insurance in a long time.

Without their lender’s consent, they transfer the title of their home to a new owner.

Their property is severely damaged, and hence its worth will be reduced.

Use their property for unlawful purposes, such as drug dealing.

What Happens If I Fail to Pay My Mortgage?

If you default on your mortgage, you will have the opportunity to repay your loan before your lender takes possession of your home. If you fail to contact your lender, you can expect to go through the stages outlined below.

Your debt is being accelerated by your lender.

Your lender may apply the acceleration clause in your mortgage contract if you are more than 30 days behind on your payments. Your lender can utilize this clause to accelerate the debt and demand that you pay the entire remaining balance of your loan right away. This step makes it easier for your lender to foreclose on your home in the future.

It’s possible that your house will be foreclosed on.

If you don’t have the money to pay your mortgage’s outstanding sum, your lender will foreclose on your home. You’ll have around 120 days before foreclosure proceedings begin, depending on your state’s regulations.

It’s possible that you’ll lose your home.

You’ll be compelled to leave your house if your lender goes through with the foreclosure. Once your lender has custody of your property, they will auction it off to reclaim the monies you were unable to repay.

The key thing you should remember during any holiday is to budget, budget, budget! I’m not saying that you should shop for gifts at the local Dollar World but did you have to spend $1200 on that coat, $700 on a purse, and a $500 pair of high heel shoes especially if you can’t afford them? Some of that money could have gone to your mortgage. Develop a spending plan. Figure out exactly how much money you owe, how much you earn, create a budget, and then determine how much money you have each month to pay down those high-interest debts, such as credit cards and mortgages.

If you’re already feeling the symptoms of the Holiday Hangover, here are a few steps you can take:

Consider any assets you have that you could sell to earn some more cash. Your car could be one source of money if you can live with taking the bus for a while.

Is there anyone that you live with who can work an extra job to bring in more of a total income?

Seek professional advice. Anyone who is licensed, experienced, and ready to help can assist you to get back on the wagon, budget your money and finish your mortgage in Ontario.

Personal loans from family or a friend can help you out a lot to pay off those larger bills like your mortgage. Make sure to make it a written agreement, including any interest rates, and treat it like a loan from the bank.

Re-build your mortgage. By capitalizing on lower interest rates, you may be able to gather up extra cash every month by reducing mortgage payments, but this all depends on getting qualified and how much debt you owe. Always talk to your mortgage lender; you may be surprised with the options available to you! Remember, if you have become ill or lost your job, there may be instances where your mortgage payments may be covered through insurance. Be sure to review all your paper work, where mortgage insurance is concerned.

The only way around debt is to budget. Don’t overspend on the holidays (unless you have the money of course). Before taking any large steps, always consult an expert such as a mortgage broker who can help with rebuilding your mortgage with better terms. Since mortgage brokers are equipped with specialized resources, they can be your best bet in saving on your mortgage.

Toronto Private Mortgage Lenders – Expert Mortgage
85 E Liberty St, Toronto, ON M6K 3R4
(289) 203-7282

So you’ve started thinking about buying your very first rental property in Ontario.

Look at you go, Mr. Investor!

The problem is that you have not a single clue about what it takes to finance your idea or where to start.

I’ll try my best to answer your problem on the subject, but just remember that this article is a guide only and every mortgage application should be reviewed and assessed separately.

After some time in the real estate market, I’ve realized (and it’s pretty obvious) that real estate can be the biggest investment of your life, you’re spending (a lot of) money on the house after all however, if it works out, you can benefit a lot from it. But what if you didn’t have to pay the mortgage at all? There are ways that you can actually buy a house – without actually paying more than a down payment and a few additional costs for it.

It’s obvious that a house in Ontario still needs a mortgage (unless you’ve got a few hundred grand saved). However, a house can also be used as an investment. The most common way to do this is with a rental property. It’s exactly what it sounds like, a mortgage you take out on a property you want to buy to have tenants renting it. These types of mortgages are calculated differently and interest rates of often slightly higher since it’s a higher risk for the lender than owner-occupied mortgages. But really, you’re not paying the mortgage for the most part so a slight increase in rates won’t do too much.

So you may or may not have already started to look for a property but what exactly are you looking for? When you buy a home as an investment, you want to consider the target market you’re renting it out to.

One of the first things you should consider is the bathroom. It’s one of a home’s biggest assets and should be a high priority in deciding whether or not to buy. If you’re planning to rent to students for example who are on the go, a stand-up shower would probably be favored – less water usage and less time spent showering. However, if you’re renting out to a family, they may want a full bathroom.

The kitchen is another thing to consider. Students or single occupants generally wouldn’t need a large kitchen but a large family would.

After the pre-approval process, you would talk with a mortgage broker to see your available options. Be sure that the option you choose is going to work with your situation since over the length of the mortgage there will be several tenants – some who have more income than others. You also need to have sufficient funds in case a time comes up where there are no tenants and you need to pay from pocket. Once you’ve found a house and have been approved for the mortgage, you would pay the down payment. The down payment is generally around 20% or higher on rental properties. Now it’s all up to you to find tenants so post ads at grocery stores, laundromats, bulletin boards, tell friends, contact colleges and universities! Once you find a tenant, you’ll only generally have to worry about their payments paying off the mortgage, the maintenance, and making sure everything is running smoothly – unless you hire a property manager of course.

Whether you’re an experienced home buyer or mortgage virgin, you’ve probably come across the question “do I need a broker in Ontario?” If you plan on buying a home or remortgaging your current one in Ontario, there’s always the option to find a mortgage yourself. However, quite a bit of people quickly finds themselves in a jam after the first few years of their mortgage simply because they bought a loan that seemed good to them and didn’t take enough time to really understand its terms or shop around longer.

When you hear “mortgage” or “home buy” one of the first few things to come to mind should be “mortgage broker” for one reason – brokers are a necessity with mortgages or buying a home. Hiring a broker voids most possibilities of misunderstanding your mortgage; they’re experts and once you hire the right one, the process is that much easier. A broker has access to several dozen lenders, which allow them to sift through them and find you the best plan. Unless you’re a mortgage broker, or personally know one, chances are that you’ll only have access to a few lenders so there’s a greater chance that you’ll miss a better opportunity. Qualified brokers on the other hand have all that information at hand.

The utmost important thing to look for when hiring a mortgage broker in Ontario is if they are qualified. Finding a qualified mortgage broker usually means that they love what they do – and are licensed by the province. They invested time and money into being qualified and know that they run the risk of losing their qualifications if they give bad advice. Since people don’t buy a house often, brokers strive to give you the best possible product they can. Brokers want to hear good feedback from you so you can almost be sure that the plan they provide you with is one that will suit you financially. This is where a brokers’ service comes in handy; they know all the possible choices that can work with you and your situation. They’re trained to recommend a mortgage specific to each clients unique needs and circumstances. The better recommendations they give, the better reputation they have.

Knowing a professional from a profession- may not be important and a few key things to look for is in the meeting set by you and the broker. Now I wouldn’t hire a lawyer for example who didn’t ask me questions and didn’t communicate enough to understand my claim. A professional mortgage broker will take their time in finding out exactly what it is you want and to understand what exactly you need now and for the future.

Mortgage brokers in Ontario will bring you right to the front door of your mortgage provider along with all relevant and pertinent terms. By this I mean that when you hire a broker, you have little to no legwork – the legwork is their job. All you have to do is sit back and wait. Without a broker you have to spend lots of time searching for rates, terms and mortgages, different lenders, different opportunities and you still run the risk of missing something better.

Mortgage brokers use sophisticated software in helping them find the best mortgages for you through literally hundreds of home loans. This will help them assess the products and find the best options for your situation. They will guarantee a perfect mortgage that will save you thousands and benefit you and your family.

How To Avoid A Mortgage Default

Defaulting on your loan and losing your home is obviously a terrifying scenario. The foreclosure procedure, on the other hand, does not happen overnight. There are strategies to avoid defaulting on your mortgage even if you’re having financial difficulties.

Speak with your financial institution.

If you think you’ll be unable to make your monthly mortgage payment, contact your lender right away. You have a better chance of avoiding a mortgage default if you contact us as soon as possible.

Explain to your lender why you can’t afford the payment right now, and when you expect to be able to, and how much you can pay in the meanwhile. If you contact out ahead of time, many lenders are eager to work with borrowers to find a solution.

Your lender may be willing to grant you mortgage forbearance, which is a period during which your lender agrees to let you lower or suspend your monthly payments while also assisting you in developing a repayment strategy.

Contact a Mortgage Broker in Mississauga

You can contact a mortgage broker in Mississauga if your lender refuses to provide you any  forbearance.  A broker  can look into your financial situation and assist you come up with a plan to prevent defaulting on your loan.

Find out if you can qualify for a refinance.

If you still qualify, refinancing your mortgage can help you avoid defaulting on your loan. Your previous mortgage is paid off and replaced with a new loan with new terms when you refinance.

You may be able to get a cheaper interest rate or extend the duration of your loan with the new loan. As a result, by refinancing, you may be able to cut your monthly payments and make them more manageable.

Consider modifying your mortgage loan.

You can get a home loan modification instead of refinancing if you don’t want to refinance. A loan modification is different from a refinance in that it allows you to keep your existing loan while changing the terms.

A loan modification may allow you to lower your interest rate, extend the duration of your loan, or even convert your loan type from an ARM to a fixed rate, depending on what your lender agrees to. Regardless of how your lender modifies your loan, the ultimate result is the same: a more affordable mortgage that will keep you out of default.

Conclusion

The prospect of defaulting on your mortgage can be frightening, but don’t let that deter you from taking action. Even if your monthly payment is already over due, you can still avoid foreclosure by taking the following measures. As soon as you notice you’re in risk of missing a payment, contact your lender, and a mortgage broker – they’ll work with you to find a solution.