Mortgage arrears refer to situations where a homeowner falls behind on one or more of their mortgage payments. When a homeowner fails to make the agreed-upon monthly payments on their mortgage loan, they are said to be in arrears. The missed payments can accumulate over time, leading to a backlog of payments and the potential for the mortgage lender to take legal action.
When you’re in mortgage arrears, the lender typically contacts you to discuss the missed payments and potential solutions. Lenders may offer temporary arrangements, such as interest addition, loan modifications, or partial payments to help you catch up on the arrears. However, should the arrears persist and you not take corrective action, the lender may initiate a power of sale or foreclosure proceedings.
Foreclosure is the legal process through which the lender can take possession of the property due to non-payment, potentially leading to the homeowner losing their home. This is why it is important to address mortgage arrears promptly and explore all available options to prevent severe consequences and protect your home and financial stability.
Your credit score is a crucial element of your financial health. Missing mortgage payments can have a profound negative impact on your credit score. A lower credit score can limit your ability to secure loans, credit cards, and favourable interest rates in the future. By consistently paying your mortgage, you demonstrate financial responsibility and protect your creditworthiness.
Home equity is the difference between the current market value of your home and the remaining balance on your mortgage. It’s like a savings account that grows as you pay off your mortgage and as your home’s value appreciates. Homeowners can tap into this equity to cover expenses, including catching up on mortgage arrears.
A home equity loan, also known as a second mortgage, allows you to borrow a lump sum of money using the equity in your home as collateral. This can be a practical solution to catch up on mortgage arrears and bring your payments up to date. It’s essential to understand the terms, interest rates, and repayment schedule associated with a home equity loan before pursuing this option.
A Home Equity Line of Credit (HELOC) is a revolving line of credit that uses your home’s equity as collateral. You can borrow money as needed, up to a pre-determined credit limit, and only pay interest on the amount borrowed. This can be a flexible solution to cover mortgage arrears while managing your ongoing financial needs.
Refinancing your mortgage involves replacing your existing mortgage with a new one. By refinancing, you can access the equity in your home and use it to pay off arrears, consolidate debt, or make necessary home improvements. It’s essential to carefully assess the terms and costs associated with refinancing to ensure it’s a beneficial option for your unique situation.
While tapping into home equity can be a viable solution for mortgage arrears, it's essential to carefully consider your individual circumstances. We recommend speaking with a financial advisor or mortgage specialist to assess whether this option is the right fit for you.
Don’t let mortgage arrears threaten your financial stability and the security of your home. Contact LendToday.ca today and take the first step toward catching up on your mortgage payments. Our experienced team is ready to assist you in finding the best solution for your unique situation. Your home is your most significant investment; let us help you protect it.
Maintaining your mortgage payments is essential to secure your home, protect your credit score, and avoid legal consequences. If you’re facing mortgage arrears, exploring options to access your home equity can be a lifeline to financial stability. LendToday.ca is here to guide you through the process and help you regain control of your mortgage payments. Your home is worth preserving, and we’re here to support you on your journey to financial stability.
If you have Mortgage Arrears with the potential for conditions to get worse - Don’t Panic! Speak with a mortgage specialist today to better understand your options.
While mortgage arrears can lead to severe consequences, there are ways to remedy the situation if you act quickly. Your mortgage lender(s) wants nothing more than for the situation to be resolved. Take action to avoid additional penalties and stop a potential foreclosure.
If you are in arrears some of the following charges might be applicable to you.
NSF Fees – for each missed payment there are non-sufficient funds charges by your bank and mortgage lender. This can add up quickly with each mortgage payment you miss.
Interest Fees – interest continues to accrue with each missed payment on the outstanding amounts.
Legal Fees – if your mortgage has been past due for a long period of time, your mortgage lender may start legal action. This means legal costs will be tacked on to the balance owed along with all other fees.
There are several financing solutions that we can help you explore to catch up on mortgage arrears. No matter your credit score or income, we can uncover a variety of short and long-term solutions to help you get back on track. If you want to learn more about your options, consult with one of our mortgage specialists today.
If you need to borrow from your home’s equity there are several options. Let us explore a few.
A home equity loan comes in handy when the unexpected happens. A home equity loan is separate from your 1st mortgage and is based on the equity in your home.
A second mortgage is a new mortgage by itself that is separate from the existing mortgage on title. It comes with its own terms, interest rate and payment. This is often a quick and easy solution to help aid in catching up on past-due mortgage payments.