HOW TO DEAL WITH MORTGAGE PAYMENT DIFFICULTIES

HOW TO DEAL
WITH MORTGAGE PAYMENT DIFFICULTIES

Source: www.cmhc-schl.gc.ca

 

 

When unforeseen financial circumstances impact your ability to make regular mortgage payments, it’s important for you to take quick action. With early intervention, cooperation, and a well executed plan, you can work together with
your mortgage professional to find a solution to your financial difficulties.

What Can I Do to Help?

If you find yourself facing financial difficulties, as a result of job loss, family income reduction, or for other reasons, it can be an overwhelming experience leaving you feeling uncomfortable and unsure of what to do. By following these three simple steps, you can make a big difference in resolving your financial difficulties.

Talk to your mortgage professional

• To increase the chance of successfully managing your financial situation through early intervention, call your mortgage professional at the first sign of financial difficulty;
• Ask the mortgage professional about information on the options available for managing your financial situation; and
• Keep the mortgage professional informed as circumstances evolve

Clarify the financial picture In order to help your mortgage professional fully understand your financial situation, before meeting with them, prepare a detailed list of financial obligations including any credit cards, loans, household bills with the amounts owing and their due dates. Be sure to include information about your current income, savings accounts, investments, and any other assets. Stay informed The more information you have at your disposal on managing your finances, the easier it will be to make the right decisions. Take Charge of Your Debts is an online tool from the Government of Canada that is designed to help borrowers like you understand debt problems, and includes information on making a budget, budget counseling, collection agencies, credit, and credit repair. To view this tool, log on to www.ic.gc.ca (Industry Canada) and search for “Take Charge of Your Debts”.

Mortgage Brokers have access to multiple lenders, allowing you to get the best options and prices for your mortgage. They work independently, on your behalf, to search out the best lenders who understand and specialize in mortgage financing. With a Mortgage Broker, you can be confident we won’t leave you alone to find a mortgage that’s right for you. We’re on your side every step of the way. Steven Porter. Steven is a licensed Mortgage Agent with Mortgage Architects, a Certified Reverse Mortgage Specialist (CRMS); Seniors Real Estate Specialist (SRES) and Accredited Buyer Representative (ABR). He can be reached at 1-905-875-2582; steven.porter@mtgarc.ca or online at 1800Mortgages.ca

More Rates Now Hinge on Credit Scores

Never before has your credit score had such an impact on your mortgage rate. Ever since the banking regulator (OSFI) jacked up capital requirements on default insurers, and linked its capital formula to credit scores, more and more securitizing lenders have:

a) set different rates for different credit score ranges; and/or

b) raised their minimum credit scores for given mortgage products.

At some lenders, borrowers with, say, a 640 credit score are offered rates that are 1/4 point worse than someone with a 750 score. Many retail channel lenders set their internal discounts based on credit scores as well.

On conventional mortgages, the magic number seems to be 720. On scores below that, lenders’ extra insurance costs start climbing more meaningfully, and some of them pass that through to borrowers.

It all means that we as an industry are going to have to better educate our clients about this trend—because, according to a recent TransUnion poll, many folks don’t get it.

Over half (56%) of credit card holders say they don’t even understand how their credit score is compiled.

And 4 in 10 borrowers don’t grasp the importance of making more than their minimum monthly payments.

Cardholders who pay more than the required minimum each month are less risky borrowers in general. And that shows up in their credit scores. And, while the credit bureaus don’t disclose their exact scoring algorithms, those formulas seem more sensitive than ever to debt utilization and payment timeliness. - Robert McLister


- Posted by Steven Porter, Mortgage Agent - Mortgage Architects
Steven can be reached through his website at www.1800Mortgages.ca