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