No one should be under constant financial stress. If you have current mortgages, or taxes in arrears, our experts can provide relief from financial burden.
When you are behind on your mortgage payments, the sooner you act, the better. One option is taking out a second mortgage, which can raise some cash to pay other debts. Another is taking out an equity loan, which gives you better rates than personal loans and credit cards.
Canadalend.com can help you secure a second mortgage or home equity loan in Toronto, Brampton, Mississauga, Barrie, Etobicoke, Vaughan, and nearby locations.
What is a Mortgage Arrear?
Mortgage arrears are when an individual falls behind on their mortgage obligation or payment by its due date. While missing one payment isn’t catastrophic, falling behind on subsequent ones can have serious repercussions.
When homeowners miss several months' payments, they find catching up difficult. It signals to your lender that a cash flow issue must be addressed immediately. Most banks tolerate two missed monthly payments (depending on the financial institution), but three or more payments classify you as being in arrears.
Mortgages are legally binding contracts between lenders and borrowers. Failure to pay is a contract breach according to the terms outlined in your contract. Therefore, the lender has several options to address the arrears. Consequences may include:
- The lender sells the property under the power of sale outlined in the contract
- Property foreclosure
- Lawsuit on the grounds of failing to repay mortgage
- Additional debt is the lender's responsibility to pay realty taxes or condominium fees to the condominium corporation/municipality to cover unpaid expenses.
- The lender is taking possession of your property/placing a tenant in the property to offset the debt.
Canadalend Can Help, if You:
- Have fallen behind on bills.
- Want to get caught up with your mortgage payments.
- Need to pay off your income taxes in arrears.
- Are looking for home equity loan solutions.
- Have been considering refinancing
- And more!
How Long Can Mortgage Payments Be in Arrears?
Technically, lenders require a minimum of 15 days after a missed payment to initiate a power of sale. However, homeowners can make missing payments during this duration. Yet, despite the ability to begin a power of sale, lenders tend not to start foreclosure until three to six months after a missed payment.
Each bank has a different time frame. The time they may initiate the foreclosure process depends on the payment frequency. Two missed payments are seen differently than two monthly payments if you have weekly payments.
If you find yourself struggling, discussing your situation with your lender as soon as possible is essential. This will make them aware of what is occurring and ensure they do not automatically act.
How to Avoid Mortgage Arrears
There are several ways to avoid mortgage arrears. They include:
1. Refinancing to lower interest payments: If you can get a lower interest rate, consider refinancing your monthly payments. Unfortunately, this method has fees associated with it, such as origination fees, appraisal costs, and closing fees. You must ensure your savings outweigh the upfront costs.
2. Establishing an emergency fund: Emergency funds provide extra cash to cover expenses during a job loss, unexpected medical bills, or repairs. They are essential as they enable you to incur debt if the unexpected happens.
3. Getting insurance coverage: If you own insurance, you can get financial help if you can’t work because of injury/illness. It helps homeowners make payments even without income.
Solve Your Financial Problems with Professional Mortgage Arrears Advice
Missing mortgage payments and property tax arrears lead to serious financial repercussions. Falling behind impacts your credit score; if you fall exceptionally behind on your mortgage payments, you risk foreclosure on your home.
While we can assist you in resolving financial issues, you must be transparent with your current mortgage lender. It assures them you will get out of the red. You also will want to contact your lender (and not avoid it). To do so may elicit a home repossession.
Talk to a professional for advice when seeking to solve your financial problems. Some options may include:
- Switching payments to interest only, thereby reducing monthly payments
- Extend your mortgage terms
- Change your payment due date (short-term solution)
- Arrange with your lender for a brief payment holiday (which involves missed payments being accrued and spread over a more extended period to allow some room for financial interruptions).
The only drawback is that payment alterations will change mortgage terms, allowing a longer time to pay off your loan. It may cost more over the long term.
Financing Mortgage Arrears
Homeowners can refinance their loans even if they have stopped or missed making regular payments. However, your situation will dictate the product and lender. Each institution has various methods to refinance mortgages in arrears. This refinancing is based on how the mortgage is paid.
- For one-week late payments, lenders may provide a loan of up to 80% of the property value.
- Payments up to one month late, a lender may offer loans up to 85% of property value.
- Arrears between one to two months may receive 80-85% of property value.
- Missed payments on the home loan may reduce your credit score. Therefore, lenders record home loan repayments on your file, reducing your credit rating.
- Seven arrears with over two months of missed payments reduce your loan ratio. Lenders may offer 75% of the property value.
Fix Late Payments With Our Personalized Home Equity Loans
If you’re dealing with skipped mortgage payments and/or are in arrears with property taxes, now might be the perfect time to consider refinancing your home with a second mortgage in Toronto or other nearby areas in Ontario. Tapping into your current home equity not only helps pay off current bills but can also be used for home improvements, investments, or anything else.
In addition to helping you deal with your current mortgage lenders and catch up on missed mortgage payments and tax arrears, your Canadalend.com agent is committed to helping you achieve your long-term financial goals by answering questions and providing financial advice.
At Canadalend.com, we have been successfully helping clients who have fallen behind on their mortgages and property tax payments by developing sound financial solutions. The licensed independent mortgage agents at Canadalend.com will discuss your options to get you back on the straight and narrow.
Reach Out to Canadalend Today and Get Your Payments Back on Track!
At Canadalend.com, it doesn’t matter if you’re one, two, or three or more months behind on your mortgage payments. Our loan specialists will meet with you and help create a tailor-made mortgage refinancing solution that best suits your financial situation.
When it comes to getting caught up on monthly mortgage payments and property taxes, time is of the essence. Therefore, your Canadalend.com mortgage agent will work hard to get your home equity loan or refinancing approved in just 24 hours. It’s a financial solution that not only addresses more than just your short-term obligations but also meets your long-term goals.
At Canadalend.com, we are dedicated to providing 5-star customer service. Get in touch with us and a lending specialist will help set up an appointment for a free personal consultation. We will help you review your mortgage options and find the solution that fits your needs!
For mortgage arrears advice, contact one of our specialists at 1-844-586-0713 or info@canadalend.com. To view what we offer, visit our website here.
The faster you act, the better your chances of a successful outcome!