2nd Mortgages Improve Cash Flow and Credit Scores
2nd Mortgages CAN Improve Cash flow and Credit Scores
Many homeowners are working hard today but living pay cheque to pay cheque as a result of the combined amount of minimum payments they are making each month to service their debt.
You likely cant recall a time that your bank called you to offer you a consolidation loan because it was in your best interests. A constant barrage of marketing trains us to believe that your bank is there to help you...but to help you; they would need to hurt themselves...which is why you probably havent received that call from your bank.
When making minimum payments on accumulated debt becomes a cash flow problem, most people apply to their bank for a consolidation loan. A consolidation loan simply combines all the debt one owes into one large amount, which you make one monthly payment on. However, when the bank sees that the applicant is already using all (or just about all) of their available credit, they will decline the loan as the applicant is determined to be at a high-risk of defaulting. The truth is, there may never have been a late payment in 30 years, so in fact, the applicant has demonstrated just the opposite of someone that is likely to default as they ensure their minimum payments are made no matter what. The loan is declined merely as it is not in the banks best interests to approve it.
Some people that have been declined by their bank for a consolidation loan may approach companies that offer personal loans to consolidate debt. Sadly, these companies continue to trap people into an even worse situation, as they will wrap your debt into a loan where (almost)everything you pay goes to interest and there is no exit strategy. These types of high-interest loan companies have rates that often start at 20% and can go up to as much 45% interest per month.
If high-interest loan companies cant help or you choose not to work with them; you may have been advised to look into doing a Consumer Proposal or filing for Bankruptcy. You CANNOT imagine the number of homeowners with equity in real estate that have taken one of these approaches because they didnt know they had better options. From a mortgage financing standpoint;whether you file a Proposal or go Bankrupt, the effect on your credit bureau is precisely the same. You do not score any points for doing the proposal and trying to pay off your debt...which makes no sense at all.
From a credit score standpoint; the longer you go with your accounts near or at their limits;the lower your Equifax Beacon score will be. If you have made multiple attempts at obtaining a consolidation loan and were declined, your credit score will drop even further. Some people have not missed a payment in 30 years but have a score of under 650...which again makes no sense.
Banks judge your character based on your credit score. It does not matter whether you have been a customer of that institution for 30 years, have family members that bank there, or have multiple products with the bank; none of it has carries any weight when you apply for new credit.
What I have learned from years in the business is that there is next to no correlation between people carrying high amounts of debt, and their level of financial responsibility.
People carrying significant amounts of debt do so because of one of these life occurring events:
1) Relationship Breakdown
4) Job loss
Debt can also include Property or Income Tax arrears; which really needs to get addressed quickly. If you wait too long; you could find a lien placed on your home.
Credit is relatively easy to get today, and the government doesnt protect you from predatory lenders that trap you into a loan with no exit strategy. In 2018, Banks are making millions; while an increasing number of homeowners are struggling with debt. For some unknown reason;instead of helping Canadians build wealth and or improve their financial position thru real estate, the government chooses to find new ways to force people into a worse financial position by continually tightening up the mortgage regulations where you can borrow money at about 3% interest today.
If you are at the point of speaking with a licensed insolvency trustee about a Proposal or Bankruptcy, keep in mind that they may not be aware that you can leverage your real estate to improve your financial situation, while simultaneously improving your credit file. Please note that you can still get a reduction/settlement on the amount of debt you owe; without hurting your credit file and we can help you with that.
A 2nd mortgage allows you to take equity (money) out of your home to reduce or payout debt. One of the great things about this product is that it does not appear on your credit file in most cases, so your credit is unaffected by it. You permanently transfer the debt reporting on your credit file into a mortgage which will make a dramatic improvement to your credit score.
Below is an example of a clients situation that I met in December 2017; at that time his credit score was 637. The first (black) chart below shows what things looked like when he came to me. The second chart (blue) reflects what things looked like after we restructured the debt with a 2nd mortgage.
1)Client realized an additional $672 in monthly cash flow
2)Credit Score that went from 637 to 725 in only a few months.
Helping people and making a difference is something that I love to do. If your bank says no to debt consolidation; make me your next phone call as I would be happy to help you.
Remember there is nothing to be embarrassed about as high debt and bruised credit happens to just about everyone at some point. Things arent easy and money is tight for most people.
Canadian home sales edge higher in March 2019
Home sales via Canadian MLS Systems edged up 0.9% in March 2019 following a sharp drop in February, leaving activity near some of the lowest levels recorded in the last six years.
There was an even split between the number of markets where sales rose from the previous month and those where they waned. Among Canadas larger cities, activity improved in Victoria, the Greater Toronto Area (GTA), Oakville-Milton and Ottawa, whereas it declined in Greater Vancouver, Edmonton, Regina, Saskatoon, London and St. Thomas, Sudbury and Quebec City.
Actual (not seasonally adjusted) sales activity fell 4.6% y-o-y to the weakest level for the month since 2013. It was also almost 12% below the 10-year average for March. That said, in British Columbia, Alberta and Saskatchewan, sales were more than 20% below their 10-year average for the month. By contrast, activity is running well above-average in Quebec and New Brunswick.
It will be some time before policy measures announced in the recent Federal Budget designed to help first-time homebuyers take effect, said Jason Stephen, CREAs President. In the meantime, many prospective homebuyers remain sidelined by the mortgage stress-test to varying degrees depending on where they are looking to buy. All real estate is local, and REALTORS remain your best source for information about sales and listings where you live or might like to in the future, added Stephen.
5 ways to help stop the sniffles this allergy season
(NC) Spring has sprung again and while the warmer weather is definitely a welcome change, the return of itchy eyes and a constantly dripping nose may not be.
Its estimated that 25 per cent of Canadians are affected by seasonal allergies, and depending on what you are allergic to, allergy season may not just affect you in the spring but could also linger right up until the first frost in the fall.
This spring, try to avoid the discomfort by getting to the bottom of what is causing your allergies before they start. Here are five tips to help you get ahead of your symptoms:
Check the pollen forecast: Be on top of this as it can change daily and really affect your symptoms. If youre planning on exercising, go to the gym or exercise inside on warm, windy days.
When you are outside, protect yourself: Wear sunglasses or a hat not only do they look good and block the sun, they also help keep pollen off your body and out of your eyes.
Cover up when being active outside: If you are doing outdoor activities like cutting the lawn or gardening, consider wearing a mask or scarf to cover your nose and mouth.
Protect yourself from pollen: We carry a lot of pollen into the home with us. Wash your bedding more frequently during spring, summer and fall; keep your windows closed and remember your pets can track pollen into the house, too.
Find the right product: Speaking to your local Shoppers Drug Mart pharmacist can be your first line of defense. They can help assess your symptoms and recommend an over-the-counter medication or product. If this isnt enough to kick your symptoms, your pharmacist can write you a prescription for a medication in all provinces excluding British Columbia and Ontario. If your symptoms are more severe, pharmacists in B.C. and Ontario can work with your doctor to make sure you have the right treatment option for you.