There are times that we are unable to meet our financial targets and this can cause more problems by not being able to pay debts on time. During this time, one is desperate to seek solutions to debt crisis by seeking debt consolidation. One is usually very vulnerable at this stage and they can easily fall prey to scammers who seek to take advantage of your situation. Consumer credit counseling can help you clear your debts by offering possible solution tactics you can follow. However, you need to ensure that you sign up with the right agency so that you don’t get to become a victim to scammers. These are signs you need to be on the lookout for before signing up with an agency.
The range of financial services offered
Check to see what kind of financial services are offered by the agency. Usually, an agency will offer more than one financial service. They can offer budget counseling for those heading towards debt problems and housing counseling for people facing foreclosure on their homes. These are just a few. These counseling sessions can be one on one or over the phone or even over the internet depending on what works for you. A small maintenance fee is required and you should have your payment records well kept on your side. This applies even to the nonprofit agencies.
Don’t be pressured into signing debt management plans
Be wary of agencies that pressure you to sign up for any sort of debt management plan. It usually takes a credit counselor one hour to evaluate your income, expenses and debt before they can come up with a solution. If a credit counselor is rushing through this process, then they may not be legit. You should never be asked to pay any fee upfront before getting some counseling evaluation on your issue. Note that no agency has the power to erase information on a credit report and the only way to do so is by planning to make payments over time. A good agency will help you plan how to achieve that.
Ability to help resolve debt problems
A genuine debt consolidation agency will have a good reputation of helping its clients get out of debt successfully. You can research first on an agency before signing up by asking for references from family and friends. You can also check the reviews on their website from people who have been there before. To check if the agency has a good standing, check with the Better Business Bureau to check out of any complaints made against them. In this case, it is best to be realistic that there will be always someone who has something to complain about. What is important is to check how the case was handled and how the customer service was.
Is it a non-profit?
Just because a debt consolidation agency advertises that they are a non-profit does not mean that they are legit. You can check an agency out from a third party accredited organization to inquire about the legitimacy of this agency.
Any time you are struggling with finances, life seems not to be moving. This is especially the case if you are thinking of acquiring a mortgage. The truth is that struggles will always be there. But you have a real chance of acquiring one even when there are such struggles in life. You only have to be informed and work over or around them, to give yourself a better chance as you present your papers for a mortgage application.
Whether you have a bad credit score or a lower income, financial institutes always try to come up with a way to make things work for the maximum number of people. Let’s look at some of the ways to combat issues that may hinder mortgage acquisition:
When your credit score is poor
The detailed report about your financial past, how well or poorly you have managed your credit card and how well you are at paying back debt gives financiers a pretty good idea about where you stand with loan applications. Coupled with many other factors, they can easily make a good judgment on how well you are equipped at paying back, if a mortgage comes your way.
With a poor score, they are at risk. But you really want that house, right? If so, you will first need to step back and start improving your credit scores. Many resources are available at how to do this, but at the end of the day, it is your money spending that needs to be worked on. Get the right advice and start working on the money management as soon as yesterday.
When you have a lower income
For lenders, the affordability of the payment to your mortgage is very important. They will not lend unless you have the muscle to repay. So what is the fate for people lower income? It is important for both you and the lender to examine and judge what the total income you have is, considering your bills and cost of living. Afterwards, you can easily check the affordability of a mortgage to a certain house. If it stretches you too thin, you can do a bit more research about more options of less expensive houses.
When you have a small deposit
Smaller deposits for mortgage acquisition are not a very good start. It should be noted that you need to have at least 5% of the house’s cost as a deposit to have a good chance of paying lower interests to the house. That said, it is prudent to start saving your money early. You can also reach out to institutes that give you some help in doing the deposit, so that you can eventually have the upper hand with the house.
These are one of the hardest groups of people to award a mortgage to for financiers. For you to be given one, you must prove that you are stable in your business. This means that you must present your tax returns to the institute over the last 3 years, offer chartered accounts and give detailed projections about your business. This does not mean that it is impossible to get a mortgage, though you will need the help of a mortgage dealer to work you through such details, so why not get one?
Buying a house can really get you so excited and when you are jumping with much anticipation, you become so engrossed at the beautiful houses that you see without actually looking back at the expenses that will come with the purchase. Sometimes, since you are so in love with a certain property that you have come across with during your search, you will tell yourself “I am ready to get the mortgage needed to buy this.”
Are you really ready for that type of investment? What if it costs you more than you can afford? Well, your lender will definitely jump for joy with this scenario. This will definitely mean more money for them. Besides this obvious answer, there are different reasons behind why you should buy a house that costs less than you can afford.
Buying less than you can afford will benefit you more in the future
Gone were the days when you can be made to believe that the more expensive home will mean more value for you in the future. This may be true in the past considering that land was once a very limited commodity. The belief that housing prices will always appreciate in the future is just part of theory. The truth is you might end up losing more if you pay more especially if you do not plan of staying in that home for a long time, say in the next 10 years or so.
It can save you in all other expenses once you move in
Many times, the price speaks for the size of the home you are going to purchase. The more expensive the home is the bigger or more spacious it will be. It can also mean more modern amenities inside the property as the case may be. With these conveniences added to the cost that you are going to pay for, expect more expenses to come in as well. Everything will be higher starting from insurance premiums and property taxes to utility bills. It can even mean more cost on repair, upgrade and replacement.
It can mean better savings for your children’s future
When buying a home for your family, it follows that you will consider the needs of your kids. Many times, you presume your children need more space where they can move around and play whenever they want to. Remember though that this is just the short-term part of the picture. You have to think long-term when the best interest of your child is at stake. Therefore, if you buy a larger home with a more expensive price tag to it, you will end up paying more on your mortgage rather than saving more for your child’s future.
Getting the home that you are in love with can mean more expenses on your part. You then have to weigh in and make sure you only get the property that costs less than what you can afford. In doing so, it will be good to take a closer look at your mortgage opportunities through the help of a broker who can help do the math for you.
Buying a home and securing a mortgage is a major financial commitment. This is why you need to make an informed choice before settling on a mortgage rate from a certain company. For a first time home owner, this process may seem overwhelming but with the right research, you will be well equipped with the information you need to help you make a decision. We are going to look at some ideas that will help you get low mortgage rates.
There are two types of mortgages available in the market. Fixed rate mortgages and adjustable rate mortgages are given depending on the requirements of the client; however, many home-owners go for the fixed one. As a soon-to-be homeowner though, you need to understand what each type offers.
A fixed rate mortgage is one that offers a fixed rate of interest that you will be paying throughout your repayment period. The benefit of this type of mortgage is that you can easily plan on how you will pay at the end each month. The rates are not affected by the economic status. However on the downside, if there are favourable economic conditions, you will not get any financial relief. Knowing this you will decide which type of will work the best for you.
Every approved loan needs an initial down payment. Mortgage brokers advise their clients to save first before buying a new home. You need to understand that when you make a huge deposit on your down payment you get low interest rates but if you pay less you get high interest rates.
Usually, at the final process of paying off a mortgage, there are costs that one needs to pay off. They roughly add up to around 3% of the actual property value. The lenders charge this amount to constitute costs to cover things such as the processing fee, underwriting title insurance costs and appraisal costs. As you look around check on mortgage lenders that offer the best deal on closing costs.
Compare mortgage deals from various lenders before making a decision. However one is advised to seek the services of a mortgage broker since they will save you the time that you will use going round checking on mortgage terms. They are well experienced and since they liaise between you and the lending institutions .They already have the information that you need. They advise you on where best to invest in.
There are implications that come with getting into signing off on a mortgage if one is not fully ready to make the investments. Checking your credit score ensures that you get your financial position and if you have a low credit score, it advisable to first work on improving the score before applying for a mortgage. However even with a bad credit score you can still apply for a mortgage and your mortgage broker can help you with this. If you decide to take on the mortgage you can later decide to refinance your home and increase your credit limit which allows you to pay in smaller instalments.
Gone are the days when you have to allocate a very huge amount of cash in order to purchase the property you have always wanted. Now, in the Canadian mortgage scene, you can potentially buy the property within a certain percentage of down payment, which is often five percent. When this is the case, however, you will be required to have mortgage default insurance which then brings you back to just settling for more than the 20% down payment for the property.
This is called the conventional mortgage or one where you are expected to pay at least 20% of the property’s value as down payment with the remaining 80% or less financed through a lender. This will then be the Loan to Value ratio of your property. Always remember that the higher the contribution you make, the lesser the mortgage loan amount you will pay over time. Whichever the case, whether you choose a 5% or more than 20% down payment, you might as well consider learning how to save for that amount.
Save your funds in an account
Saving for the down payment is perhaps the most practical way with which you can get that dream home of yours. It will take time to save this amount if you do not learn how to choose the right account with which you should save those funds. It is recommended that you have an account that guarantees you will gain interest on your savings. Mutual funds, term investments or a Canadian Tax-Free Savings account can be a good start. You may also want to invest with a Registered Retirement Savings Plan (RRSP).
If you are lucky enough, you can also use the cash gifts given by your friends and loved ones. You can save the same in any of the funds mentioned above so that when the time comes and you are ready to make an investment, there is something you can use to finance your down payment.
Secure mortgage default insurance
If in case you have not saved the 20% down payment but you have at least 5% savings to finance the down payment for your dream home then you are good to go provided you have secured mortgage default insurance. You can look for the best suppliers of such insurance in Canada. This insurance is a licence for you to obtain the nod of the lender since there is something he can ran after in case you default on your payment. Do not mistake this with the regular homeowner insurance that protect homeowners from property damages.
Pay the insurance accordingly
You have choices when it comes to paying the mortgage default insurance. First, you can pay it on a lump sum basis right at that instant when you have closed the mortgage deal with the lender. If you do not have enough money to pay it lump sum, however, you can go for option number 2, that is, to pay the insurance over time in addition to your monthly mortgage amortisation.
It will be wise to compare mortgage rates to save you more in terms of your total investment later on. Feel free to compare rates via this website!
One of the most common challenges people with bad credits face is getting a good mortgage. Luckily, there are bad credit mortgages that cater specifically to such individuals. People make financial mistakes sometimes. However, it does not mark the end of your dream to own a house. There are useful ideas that make things work even with bad credit. Hard financial times and mistakes put you on the right footing when you learn from them. To make a bad credit mortgage work for you, you need to consider the following ideas.
Type of lenders
Many lenders will probably turn you down when you approach them for a loan with a bad credit score. By searching around carefully, you can still find lenders who can assist you in your current financial situation. It is possible to get a mortgage with a bad credit. Bad credit mortgage lenders make it possible. However, you need to be careful when selecting a lender. There are lenders who may take advantage of your situation. Ensure you find reputable bad credit mortgage lenders before taking further action.
Work on short-term basis
For a fact, it is costly to get a mortgage with a bad credit. If you decide to get the mortgage loan, you need to consider making it a short-term commitment. It pays in the long run when you choose to make short-term commitment. Managing the mortgage payments over a short-term period makes it possible for you to be eligible for conventional loan programs that have low interest rates. Note that this does not imply getting a short-term loan as an alternative. It simply means ensuring you pay the mortgage on time. This is inclusive of all your debts and bills. Over time, your credit score will improve and earn you a chance for better conventional loans.
The interest rate for a fixed-rate mortgage may be too high for you during tough financial times. Therefore, you can consider an adjustable-rate mortgage as it guarantees you the possibilities of getting low rates. It helps keep the mortgage payment low and realistically manageable in your current financial situation. Consult mortgage experts for more clarity on how to make good use of an adjustable-rate mortgage.
Different types of lenders have varying terms and conditions. For instance, there are mortgage lenders who have a prepayment penalty option. These lenders often convince borrowers to take the option. In a mortgage contract, this clause essentially gives the lender the liberty to collect additional money when you make early payment or additional payments beyond a given limit with a view of reducing the debt. Over time, it can be very costly. You can make extra payments if you are in a good financial position as it will help reduce your debt. For the clause, do not consent to the idea.
Working with a reputable mortgage broker is highly recommendable especially when you are in a tight financial spot and you need to make critical choices. A broker will help you to make use of all these ideas in the most effective way.
One of the first steps of becoming a savvy investor in Canada’s real estate scene is to be familiar with the average rental prices in Vancouver, Montreal and Toronto. This invaluable knowledge will also prevent you from making any regrettable decisions.
Rental prices in Montreal
Montreal is popularly known as a city of renters because it has a great reputation for being a town with good bang for your rental buck. In fact, it has the largest rental market in Canada with rental housing options such as duplexes, triplexes and apartments. Montreal offers a broad range of old and new dwellings that offer a variety of architecture and styles to suit many tastes.
When it comes to rental apartments in and around Montreal, the average rental price is over $1,100. In addition, one-bedroom apartments can be rented for approximately $970 and two-bedroom apartments can be rented for approximately $1,180 per month on average. Over the years, studies have shown that the average rental rates for one-bedroom apartments have decreased by 0.5% and two-bedroom apartments have decreased by 3.1%.
Rental prices in Vancouver
Vancouver has the highest rental rate throughout Canada and it is approximately $1,280 per month on average, and that’s why Vancouver’s tenants are starting to feel the squeeze as rentals prices keep increasing. In addition, nearly half of Vancouver’s population rents. These tenants prefer to live older apartment buildings that are located along Main Street and other arterial roads.
Still, there are other tenants who rent bigger houses that are “carved” up into luxurious suites. One of the reasons why Vancouver’s rental apartments can fetch up such a high price is because investors tear these units down then builds them anew. Once these units receive a facelift, their owners can then easily double the price of the rental fees.
Rental prices in Toronto
Just like Vancouver, Toronto also tops the list when it comes to high rental prices. The price of a rental two-bedroom unit is more than $1,260 per month on average. Just west of Toronto, there are units in Burlington that go up to $1,550. What’s more, Burlington is just one part of the Greater Toronto Area and already has a population of over 175,000. In addition, an increasing number of new housing developments are springing up and rental properties are becoming more popular with people who work in Toronto while wanting to stay away from the hustle of a big city.
Interested in buying a second home in one of these cities to rent out?
You should first know that you are going to be a landlord, and that’s why learning how to manage the property and your tenants come with great pertinence. There are a lot of ways to invest in a rental property, and it starts with choosing an apartment that’s located near your child’s college or a unit in an existing multifamily condominium. The next thing to keep in mind is not to neglect to run the numbers. From online mortgage calculators to a mortgage broker, there are many avenues that allow you to get help to calculate down payments, insurance, taxes, and more.
The statistics of the typical first-time homebuyers are fast changing today. A lot of single women these days can afford to buy properties on their own to build up valuable equity, and are no longer waiting to find a life partner prior to pursuing the lifestyle and financial advantages of owning a home. One in every first-time property buyers today is a single woman, and new property market is in sense beginning to reflect that.
While most of these women are ready to jump into the commitment of owning a home, not all of them are willing are give their valuable time to outdoor chores such regular yard or garden maintenance. As such, the majority of these women tend to purchase homes that require little or no maintenance, but with an option to plant container gardens.
The easiest and most fashionable way to hold onto their maintenance-free lifestyle is to acquire a condo. These properties are problem-free when it comes to their upkeep and unencumbered lifestyle is an obvious advantage to people that would rather not be tied up every weekend with maintenance chores.
Condominium unit owners are charged a flat monthly rate to cover maintenance of the common areas in addition to provide prompt service by reputable maintenance service providers if there are maintenance issues in any single unit. Problems related to electrical, plumbing, air conditioning and heating systems are handled by pre-approved maintenance staff as agreed with the condo management or association. This means help is available at a moment’s notice.
Women looking forward to purchase their first home have two options to opt for when it comes to financing their purchase; paying cash or through a home purchase loan product such as a mortgage. But whichever the financing option, it is critical that they work out a practical budget. This does not just imply working on a budget they can afford based on their current state of affairs but that can allow some room for changes. Skilled private mortgage experts in Canada recommend keeping mortgage interest rates as low as possible.
Consider other day to day living costs
When mulling over how much you should borrow, it is critical to allow for increases in other living costs, particularly where utilities and food are concerned. All these should not scare you off purchasing that great condominium you have always wanted but rather to urge you to work out a budget that you can comfortably afford. Once you have found a dream property to purchase, it is easy to forget other things that are equally important for your day to day living.
Use a home loan calculator
Make use of a home loan calculator to help you easily determine the kind of a home buying budget you can afford. When calculating what you can really afford, it is critical not to ignore your supplementary expenses. For instance, if you love eating out, or going to the theatre, or even indulging your passion for surfing, then make certain to include these costs. This way, you will know what kind of a condo or any other home type you can afford without having to give up your favorite hobbies.
So you are planning to acquire an investment home. Or probably are ready to purchase a second home. But do you know that these two property types are quite different where their purchase is concerned? To start with, getting a mortgage loan to purchase an investment property is costly, and the whole application process is complicated.
Financial institutions often charge clients higher rates for investment properties as these are deemed a business venture. The main reason for this is that borrowers are borrowing to acquire investment properties for renting out or even selling for a profit. These loan types are considered riskier than those that are availed to ordinary homeowners. Since the borrowers won’t be staying in their investment premises, the majority of lenders believe they might abscond from their payment obligations if they suddenly find themselves financially incapacitated.
The higher than normal interest rates offer additional protection to the lenders. Moreover, most of the lenders require borrowers to pay a higher down payment – normally at least 30% of a home’s final sales figure, when they receive a loan to purchase an investment property. In this case, it is critical to differentiate whether you are buying an investment premises or a second home.
Like mentioned above, premises owners normally don’t live in their investment properties. Instead, they rent them out all through the year. Sometimes, they might even plan on holding their premises until they appreciate enough in value to allow them to dispose them off for a healthy profit. Unlike second homes, investment properties could be situated near their owner’s main residences.
Can an investment property be a second home?
Second homes are properties in which owners live in them for a given duration of time each year. Simply put, second homes can be deemed to be vacation properties. If their owners don’t live in them on a regular basis, lenders then consider them as investment properties. For a property to meet the criteria of being termed as a second home, then it must be some distance away from your primary residence. In this case, it must be more than fifty miles away from your main dwelling.
Is it worth it tricking the lenders so as the get a given mortgage product?
Since all investment properties attract higher interest rates, some borrowers are tempted to try tricking their mortgage loan provider by claiming that their investment property is in fact a second home. This way, they can then lease their premises and earn a healthy income without incurring a higher interest rate in mortgage payments. In actual sense, this is a mortgage fraud, and if a property owner is found out, they he or she could face stiff penalties. Mortgage fraud is a growing problem around the country, and mortgage loan providers are well trained to discover mortgage applications that seem to be for investing purposes although they made to look like second homes so as for the borrowers to obtain better interest rates.
All in all, you can’t own two vacation homes in the same location, even where most of the dwellings there are deemed second homes. People that own more than one vacation homes in one location therefore are required to consider the second premises as investment properties.
Paying off your mortgage early is the surest way to give yourself a peace of mind especially when there is so much on your plate. Early payment of mortgage makes sense because most people want the security and psychological merit that comes with home ownership free from the burden of debts. While finding experts who offer recommendations for early payment of mortgage is an ideal step, you can still pay off your mortgage using methods that are faster and safer as compared to others. Here is a look at some of the effective ideas for loan payment.
The magic is usually in the mortgage calculator. When you play wisely with the mortgage calculator, you will clearly see how the addition of little payment to your principal here and there significantly reduces the length of your loan. The key thing here is trying to figure out an affordable amount of money that can reduce the loan-term without affecting your financial position. When you pay a little more principal, you get a bonus. As your principal gets lower, payments made henceforth are applied on your principal. Always make sure that when you are paying extra, it is applied on the principal balance instead of being set aside for the next payment.
Short-term mortgage refinance
A 15-year mortgage is quite common though you can refinance into a mortgage for 10, 15 or 20 years. Therefore, you may want to consider a 15-year mortgage because it may not be as high you think even though people think high payment is involved. The advantage of a 15-year mortgage is getting committed to the higher payment. You hardly get a chance to dither about your ability to afford the extra payment every month. In that case, you can achieve the effect of a short-term mortgage (when working with a 30-year loan-term) by making payments as though you were paying for a 15-year loan-term. This puts in you in control instead of the money lender.
Consider biweekly payment option
A year has 52 weeks and 12 months. Biweekly payment works best when you make plans while factoring 52 weeks and 12 months in a year. Therefore, when you pay half the regular mortgage payment every other week, you will make 26 half-payments by the end of the year. That is equivalent to 13 full monthly payments. This extra amount of money at the end of every year can chop off about 5-6 years of your 30-year mortgage. You can check with your bank to see if there is any arrangement for a biweekly payment plan. Some banks will charge while some will offer free service.
It is everyone’s dream to own a home without the stress of pending mortgage payments, foreclosures, high mortgage rates and the like. With these three simple ideas, you can take your time to figure out one that is likely to benefit you the most. All these ideas aim at reducing your mortgage payment making it possible to pay it off earlier so you can have peace of mind in your lovely home.