Mortgage Arrears and Foreclosures

Mortgage arrears is increasingly becoming a problem for more homeowners these days. No matter how much one’s finances are planned, it is not uncommon to fall behind on payments during months of financial difficulty. Most people do not realize how important it is to make sure that they should prioritize paying their monthly mortgages. It seems it is easy for a lot to forget that failing to pay one’s mortgage on time can result in mortgage arrears and foreclosures depending on the terms in one’s mortgage.

What to Do if You Missed Some Mortgage Payments

The first thing you should do when you realize that you’ve missed some mortgage payments is to contact your lender right away. Ideally, you should do this prior to missing any payment at all. Be sure to be as open and honest as possible with your lender so that your lender can offer a solution or a compromise that can work well with both of you. Make sure that you honour any new payment agreement with your lender and cooperate as best as you can.

Note that failing to pay your mortgage or not following through with a new payment scheme can mean hearing the word “foreclosure” from your lender. Lenders will typically avoid foreclosure because it is a lengthy and headache-inducing process. However, also note that lending companies cannot afford to let people simply not pay their mortgages. To recuperate their losses, they are within their legal rights to foreclose a home with mortgage arrears.

What is Foreclosure?

By definition, foreclosure is a legal action taken by a lender against a mortgage borrower who failed to make payments beyond the terms agreed upon by both parties. Because the home is the collateral for a mortgage loan, the lender is legally allowed to repossess a home and sell it to recover any loses from the money that the is owed.

Foreclosure can happen after a homeowner failed to make several mortgage payments. It doesn’t happen after a single missed payment. Foreclosure happens as a result of mortgage arrears, which means missing payments for a few months in a row and not cooperating with the lender in terms of payment. The process is lengthy and will mean receiving a few demand letters at first, typically at the 30 days, 60 days, and 90 days mark of missing a payment. Mortgage arrears will kick in after 90 days of non-payment. The foreclosure process will then soon follow.

The foreclosure process can vary between provinces in Canada. It is best to take initiative and address any mortgage arrears as soon as possible to avoid foreclosure. Once a property has been in mortgage arrears for more than a certain length of time, the lender can either go through a judicial sale or a power of sale for them to be able to recover their loses.

Save Your Home

The best way to save your home in case of mortgage arrears is to contact the lender or find a way to make payments as soon as possible. We may be able to offer some mortgage arrears solutions for you at Mortgage Central Canada. Contact us and we’ll discuss what we can do for you based on your situation.

 

The Most Popular Reasons to Get a Home Equity Loan in Canada

More Canadians are getting home equity loans in recent years to make use of rising home prices and low-interest rates but these are not the only reasons why they are tapping into their home equity. Below is a compilation of the top reasons why people get a home equity loan in Canada.

Home Equity for Debt Consolidation

Getting a debt consolidation loan tops the list of uses for home equity in Canada. People go for it because loans that are tied to residential equity have a significantly lower interest rate as compared to other types of loans. By using home equity for debt consolidation, homeowners can manage their various debts faster as well as save money on interest.

Home Equity for Paying CRA Tax Money

A borrower who owes back taxes will not be lent new loans by banks unless the homeowner applies for a loan backed by their home. A short-term loan like this can help someone sort out their taxes and manage their financial issues.

Home Equity Loan for Spousal Buyout

A divorce often means dividing conjugal assets so that each party walks away with their half. This isn’t very easy to do when most of the couple’s assets are tied to their property. A home equity loan will allow one spouse to keep the family home and pay-off the other party for a clean break.

Home Equity for Home Renovation

A huge percentage of home equity loans taken in recent years were made for the purpose of funding home renovations. By using home equity for home renovation, a homeowner can have access to funds to improve their home and increase their property’s value. By doing this, it will be easier to refinance mortgage later or take out some other loan when needed.

Home Equity for Business Loan

It takes money to start or expand a business. However, it is often not easy to sway investors to want to put their money in someone else’s business. By tapping home equity for this purpose, a homeowner can take advantage of using what he or she already has and with friendlier payment terms to as compared to other business-related loans.

Home Equity Loan for Big Purchases

Trying to purchase a home or a car with a loan when you’re self-employed can be very challenging in Canada. Luckily, homeowners can take advantage of the different types of home equity loans to buy a home, a rental property, or a dream car. This is great news for the approximately 15% of Canadians who are self-employed!

Home Equity for Construction Loan

Building a house from the ground up is very expensive. The good news is that if you’re building your second home you can make use of your current home’s value to help fund the construction.

If you’re interested to apply for a home equity loan in Canada, you’re at the right website! Contact us and we’ll walk you through with what you need to know and help you get your loan approved!