How to Refinance Your Mortgage with Bad Credit?

Did you know carrying too much debt can lead to a poor credit score rating? Yes, it is true. If you are carrying too much debt your credit score will be impacted greatly. Especially, if you maintain high balances on your outstanding debts. Having your debt utilization close to 100 percent or over of the limit you have on your outstanding debt will result in a low credit rating. 

So if you are drowning in debt, then consolidating your debt with a mortgage refinancing will help increase your credit score rating and provide overall savings in your monthly payments. But a common question as by clients is; how can you refinance your mortgage if you have bad credit? The simple answer is that it can be done, but there are a few things you need to understand first. 

What is a mortgage refinance?

Refinancing your mortgage simply means breaking your first mortgage and then getting a new one. When a mortgage refinance is done for the purpose of debt consolidation, the new mortgage will be for the amount still owing on your home, plus the amount of debt that you are paying off with your mortgage. Technically, your total debt does not go down when you consolidate with a mortgage refinance but the amount of interest you have to pay does, which results in lower monthly payments and monthly savings. This will help you to be able to pay off your debt more quickly, which in turn will help to repair your credit. 

How much debt can I consolidate with a mortgage refinance?

That depends on how much equity you have in your home. Your home equity is the value of your home minus how much you owe on it. Most lenders will allow you to use up to 80% of your homes appraised value when you refinance. That means if your home is worth $500,000 and you still owe $200,000, you will be able to pay off up to $160,000 with a mortgage refinance.  However it 80% is not enough to help with your refinance amount then we have access to special lenders who are able to go up to 85% and even 90% of your homes appraised value. Even if that doesn’t work for you then we can look at a customizable refinance plan for you to help with consolidating your debt.

Are there any drawbacks to this? 

Before you decide to pay off debt with a mortgage refinance, it is important to understand that you are guaranteeing the loan with the equity in your home. That means, if you become unable to make the payments, you risk losing your house and putting yourself in further financial stress. 

If however, you can commit to making regular payments (and not taking on new debt), not only will you get out of debt faster, but you’ll be repairing your credit at the same time. There is risk – but only you can always discuss with us to understand if it is worth the risk. 

How can I refinance my mortgage if I have bad credit?

The truth is that with a traditional lender like a bank or a credit union, you may not be able to. But as a Mortgage Broker in Brampton, I have access to many reputable alternative lenders that specialize in helping those with bad credit. 

If you are ready to take control of your credit, getting a mortgage refinance may be the way to do that. Call me today to set up an appointment. 

How Home equity line of credit works in Brampton?

A home equity line of credit, which is also referred to as a HELOC is a kind of mortgage that uses an individual home as collateral and allows them to borrow the equity in there in a form of a line of credit.

A home equity line of credit works similar to revolving loans such as a personal line of credit or a credit card but instead without the high-interest rates that are charged with credit cards and personal lines of credit, a home equity line of credit offers you a much lower interest rate.

Unlike other loans that offer a one-time lump sum amount immediately, a HELOC allows you to borrow in a way you see fit. That means you want in or as little as you want in one or many transactions. It can be done in one day or over a course of a few months to even a few years. Because you are using your home’s equity as collateral for borrowing money, you are able to get access money in a fast and easy process. There is no need to re-apply over again, simply borrow what you need and pay it back and then borrow again and repeat. It’s really that simple.

Financial solutions

Our team understands that your home is one of your most prized possessions and a valuable asset, and to your benefit, your home can be used to get a home equity line of credit. This amount can be used to fund your child’s education, undertake renovations to your existing home or office, pay medical bills and much more. All you have to do is discuss your needs with us and our team will provide you a suitable solution. 

Lower interest rates 

An important benefit of choosing a home equity line of credit is that the interest rates are lower than other types of loans such as private mortgages or second mortgages. Since the amount of the HELOC is provided to you over a period of time, you can repay the amount in a time frame that is suitable for you.

 

Uses of a home equity line of credit

  • Your home equity line of credit can be used for an array for purposes including renovating your existing home, undertaking repairs, painting and much more.
  • If you have an unexpected medical bill, this can help you pay for hospitalization, aftercare and more. 
  • If you have lost your job and need to provide for your family HELOC can be the perfect solution.
  • This amount can be used to fund your child’s higher education.

Are you looking for a home equity line of credit? Get in touch with us now. 

Our team of experts offers home equity line of credit on a regular basis to homeowners and we can help you get to access your home’s equity with a simple approval process. All you need to do is get in touch with us now, we serve homeowners across Brampton.

 

How to get a second mortgage with bad credit?

A second mortgage is a perfect alternative to mortgage refinancing or taking out an unsecured loan for when you need money when you have bad credit. We all know that it is no secret that having a bad credit score can make it challenging to find lenders that will work with you and offer you a refinance including your bank, however this when a second mortgage can be a great option help you out.
If you have an existing mortgage and want to get rid of the high interest debt or outstanding debts you have, then you may be able to refinance those debts outside your mortgage into a second mortgage with low affordable monthly payments without worrying about your credit check or income verification. To get more information on your particular financial situation and how a second mortgage can help you then you need to talk to our experts and get in touch with us now.

What is bad credit history?

A bad credit history means that an individual has a record of having poor or lack of financial responsibility. Issues such as; a bankruptcy, collections, late payments or not being able to make payments on time towards your debts, can all lead to a low credit score. It is essential that you obtain a copy of your credit report and repair your credit file by requesting to make corrections in your report, such as if you have noticed any mistakes then you should make sure that they are corrected immediately. However, it is important to make sure you if you have any outstanding debts or collections that they are all brought up to date and paid in full. This will help bring your credit score up over time as long as you continue to make regular payments to creditors on all your other outstanding debts. Our team understands that it can be daunting and challenging process to understand how credit works and we are here help. Not to worry you can rely on our team to help you get a second mortgage with low affordable monthly payments even if you have a bad credit score.

Professional and reliable mortgage experts

Having a bad credit score can make your search for a mortgage difficult. But it doesn’t have to be, you can rely on us to help you with finding a second mortgage option that will work with your credit rating and financial situation. Our team has many years of experience in helping individuals find a second mortgage for with bad credit at great rates and affordable monthly payments.

Here are a few factors that will help you with getting a second mortgage:

Have at least 20 percent or more of equity in your home
Provide an on-time bill payment history
Provide proof of stable employment and income history

Home equity loan with bad credit

If you’re a homeowner with equity in your property, there are chances that you can still be eligible for a second mortgage. Contact our mortgage experts today and we will help you with all your requirements.

For more information about how you can get a second mortgage with a bad Credit score in Brampton, call us to know more

 When you should opt for a home equity line of credit?

With so many mortgage products that allow you to borrow equity from your home that it can be hard to know which option is right for you. Ultimately, the best thing to do is to sit down with your mortgage broker, since they can bring up questions you hadn’t thought about. But having some kind of knowledge about which products do what, can give you a good idea of what is best for you when it comes to borrowing equity from your home.

In this article, I will discuss home equity lines of credit (HELOCs) and when they might be the best choice for you. 

What is a HELOC? 

A home equity line of credit, also known as a HELOC is a revolving line of credit. It works in a similar way to a credit card where you get a borrowing limit that you cannot exceed and you only pay interest on the amount that you have borrowed at any given time. The main difference however, is that your HELOC is tied to the equity in your home. This means you’ll have a lower interest rate than a credit card, but it also means you risk having your home go into foreclosure if you can’t make the payments. 

When should you opt for a HELOC? 

There are many scenarios in which a HELOC can be your best course of action. These include:

  • When you want to consolidate your higher-interest debt. Using a HELOC to consolidate your high interest debt can help you pay off your debt faster and improve your credit score. 
  • When you want to pay for a home renovation. Home renovations can be expensive, and are even more expensive if you have to use a high-interest credit card. A HELOC allows you to borrow from your home equity, while you increase the overall value of your home with a home renovation. 
  • You want to invest in a business – More and more Canadians are becoming entrepreneurs, but oftentimes, banks won’t want to take the risk of lending you your start-up capital. If you are starting a business, one way to get the capital you need is with a home equity line of credit. 
  • You need to pay for emergencies – HELOCs can also help you pay for emergencies, such as a vehicle repair or unexpected medical cost. It can give you peace of mind knowing that you have a HELOC to borrow from in the event of an emergency. 

Do you think a home equity line of credit might be the right choice for you? If so, give me a call and we can discuss it further!

 

 Why you should get a debt consolidation mortgage?

If you are looking for a way to get out of debt, you may have heard of something called a debt consolidation mortgage. But exactly is a debt consolidation mortgage? Well it is simply a mortgage (usually a second mortgage or a refinanced mortgage) that uses your home equity to pay off your debt. Most lenders will allow you to borrow up to 80% of your home equity in order to do this, but there are a few who allow even a higher amount even up to 85% or even 90%.

 

Now you may be wondering, what is the point of this is. After all, don’t you still have the same amount of debt once you have consolidated it? The answer is, yes you do. But there are many good reasons to consider a debt consolidation mortgage if you are struggling with debt, let’s go over 4 great reasons why. 

 

  • You lower your interest payments.

 

Credit cards, payday loans, and even personal lines of credit can have fairly high-interest rates. When you pay them off with a debt consolidation mortgage, you almost always end up with a much lower interest rate. Not only does this help you to pay off your debt more quickly, but it might also even lower your monthly payments leaving you with more money at the end of each month!

 

  • One convenient payment.

 

If you have multiple credit card or debt payments, it can feel overwhelming and it can be easy to forget a payment. This hurts your credit score. With a debt consolidation mortgage, you only have to remember one lender and stay consistent with that monthly payment. 

 

  • Improve your credit score.

 

Having too much debt is not good for your credit score. By consolidating your debt and lowering your interest that you pay on that debt, you will be able to pay off your debt sooner and begin repairing your credit score. 

 

  • Lower your stress.

 

No question about it – debt is stressful! Perhaps you have racked up a lot of debt and don’t see how you will ever be able to pay it off. Getting a debt consolidation mortgage can help you pay off that debt years sooner. 

If you would like to learn more about debt consolidation mortgages and how one might be able to help you in your situation, contact me today for an appointment. 

Can you pay off a Home Equity Loan early?

 So, you’ve got a home equity loan that you’d like to pay off? When you originally got your home equity loan, it provided you with a lump sum of cash that you needed to start a business, complete a home renovation or consolidate debt. However now, it is an extra payment that you have to make each month – and since you find yourself in a better financial situation, you’d like to take care of that debt and pay it off. 

But before you do, you need to check your agreement with the home equity loan lender. Because sometimes paying off your home equity loan early may not be worth it. 

How do home equity loan payments work?

Home equity loans which are also referred to as second mortgages, work much the same way that first mortgages do.  A specific mortgage term is set, and you make fixed payments throughout the term. As with the case of first mortgages, you may be able to put a certain amount of extra money on your home equity loan each year. 

If you wish to pay off the entire loan within the first few years of the term, you could end up having to pay a prepayment penalty. The farther you are from the end of your term, the higher this penalty is likely to be. So instead of trying to saving yourself money on interest payments by paying off your home equity loan too early, you could actually end up costing yourself more money than you would have saved. 

How do I know if paying off my home equity loan early is worth it?

The first you will need to check your loan agreement to see what kind of penalty you would have to pay if you paid it off early. This amount should then be compared to how much interest you could save. Since the calculations can get a little complicated, it is usually best to consult with a mortgage broker on this. 

Finally, if you do have a large lump sum of money that you can use to pay off your home equity loan early, it is a good idea to compare how much you would save by doing so to how much you could make if you invested the money or pay down your first mortgage with the lump sum payment instead. 

In conclusion, while it technically is possible to pay off a home equity loan early, it might not always be the best decision.  

If you would like help with a home equity loan – or any mortgage product – contact me today for a consultation. 

 

Why you should Work a Mortgage Broker if you have Bad Credit?

There are a lot of professionals out there who can help people with Bad Credit, but one type of professional that is often overlooked is the Mortgage Broker. And that’s a shame, because there is a lot that Mortgage Brokers can do to help individuals who have less than perfect credit.

For those looking to become homeowners

These days, it is hard enough for people with good credit to become homeowners – so is there any hope for people with bad credit? The answer is yes! Although you won’t be able to get a mortgage with a major bank if your credit is poor, there is still a good chance you can get a mortgage if you work with a mortgage broker.

As a mortgage broker, I have access to dozens of lenders, some of whom specialize in helping people with poor credit get into homes of their own. If your credit is too bad even for these types of lenders, I am able to offer you other solutions so you can own a home of your own. 

Those who are already homeowners

If you already own a home, you may be wondering why you would want to consult with a mortgage broker. Well, if you have a lot of high interest debt (like many people with bad credit), a mortgage broker can offer you solutions that can help you get out of debt faster.

Essentially, the way a mortgage broker does this is through various mortgage tools that help you consolidate your debt by accessing the equity in your home. This helps you to significantly lower the interest you are paying on your debts – meaning you can get out of debt faster and improve your credit. 

Strategies that I can offer to help you get out of debt faster include the following: 

  • Refinancing – break your current mortgage and get a new mortgage that pays off your other consumer debt.
  • Second Mortgage – a secured loan that pays off your existing debt. 
  • Home Equity Line of Credit – A revolving loan secured by your home equity.
  • Reverse Mortgage – A product specifically for those aged 55 and older that provides a lump sum of money or a monthly income. 

So, if you have bad credit and you are looking to buy a home – or if you are already a homeowner and would like help to get out of debt – working with a mortgage broker is just a smart thing to do.

To learn more about what I can do for you, contact Rumy Gill – Mortgage Broker in Brampton today for FREE Consultation 

Can you get a second mortgage with a different mortgage broker?

If you are in the market for a second mortgage and are not happy with your current mortgage lender or mortgage broker, you may be wondering whether you can switch and use a different mortgage broker or mortgage lender than you did for your first mortgage.

 

Well the answer is yes, and this is because your second mortgage is tied to your home equity and not directly to your first mortgage. This makes it easy for you to change mortgage lenders or mortgage brokers when looking for a second mortgage. 

To understand why this is the case, it is helpful to understand what a second mortgage is and how it works. 

What is a second mortgage?

A second mortgage in Brampton is a loan that is secured using the equity in your home. Most lenders will allow you to borrow as much as 85% of the value of your home equity. Therefore, if you have a home value of $600,000 and you have $200,000 left to pay on your mortgage, you should be able to borrow up to $310,000 with a second mortgage. (There are even some lenders that will allow you to borrow up to 90% of your homes equity, but these lenders base their approvals on many different factors)

How do I apply for a second mortgage?

The process for applying for a second mortgage isn’t really all that different than that of applying for a first mortgage. Your home will need to be appraised in order to determine how much home equity you have and you will have to provide a number of financial documents in the application process. Fortunately, since a second mortgage is a loan is secured against an asset that you already own (your home), you do not necessarily have to have perfect credit in order to qualify. 

Is changing lenders or brokers a good idea when I get a second mortgage?

Even if you are happy with your current lender, it is always a good idea to compare rates. Even a small discount can result in big savings over the long term.

As far as mortgage brokers, you should always work with a mortgage broker who has your best interest in mind. It is more than ok to use a different broker if you are unsatisfied with their previous service and commitment to you. If you decide to stay with the same broker, they should be willing to compare lenders for you again to see if anything has changed since your first mortgage.

Contact me today!

If you are interested in learning more about second mortgages or in submitting an application, I would love to help. Contact me today for a consultation.

How Rumy Gill Can Help You Get a Bad Credit Mortgage in Brampton?

If your credit is less than perfect, you are probably well-aware how difficult it can be to get a mortgage. What you might not be aware of however how Rumy Gill a Brampton Mortgage Broker can help you get a mortgage and finally become a homeowner – yes, even if you have bad credit. 

As a Mortgage Broker working in Brampton Rumy Gill has been helping people get bad credit mortgages for years, and he can help you too. Here’s how:

What is a bad credit mortgage? 

A bad credit mortgage – just like the name suggests – is a mortgage or home loan specifically tailored for people with bad credit. While major banks and other “A Lenders” require that you have good credit in order to get a mortgage, there are B lenders and private lenders that specialize in helping people with poor credit get mortgages. 

These lenders will look at other factors besides your credit history when making a loan. They will look at the bigger picture such as your ability to make payments and the value of the property that they are making the loan on. While the interest rates on bad credit mortgages are higher than on traditional mortgages, these loans also tend to have shorter terms. This means that it is possible to use a bad credit mortgage for a short term in order to build up your credit and eventually qualify for a lower interest traditional mortgage. 

How can Rumy Gill a Mortgage Broker working in Brampton help you if you have bad credit? 

If your credit isn’t good enough to qualify for a mortgage from an A lender, you should get in touch with Rumy Gill as soon as possible. Rumy works with dozens of lenders, many of whom specialize in Bad Credit Mortgages in Brampton

Rumy will sit down with you and review your financial situation and mortgage needs before matching you to the most appropriate B lender. If your credit is too poor even to get a loan from one of these lenders, Rumy will discuss your options for getting a mortgage from a private lender. 

Contact Rumy Gill Brampton Mortgage Broker today!

No matter what the reason is for your bad credit, you shouldn’t let it stop you from becoming a homeowner. If you have been turned down by the major banks for a mortgage – or simply know that you would be if you applied – it is time to take action. 

Contact Rumy Gill Brampton Mortgage Broker for an appointment to learn more about your options for a bad credit mortgage. 

What is the difference between renewing and refinancing a mortgage?

Most homeowners when they first sign on to a new mortgage don’t give a lot of thought to renewing or refinancing their mortgages. But eventually when their mortgage term is up (most mortgage terms in Canada are five years although they may also be longer or shorter), the time will come for them to renew.

Because the words mortgage renewal and mortgage refinancing sound similar, some homeowners make the mistake of thinking that they are the same thing. This, however, is incorrect. While both mortgage renewal and mortgage refinancing involve getting a new mortgage, they have some very important
differences.

What is mortgage renewal?
Mortgage renewal occurs when the term of your current mortgage is up but you still have money owing on your home. Usually, you will get a notice from your lender a few month or so before your term ends informing you that the term is up and offering to renew your mortgage for another term at a rate
determined by the lender.

As a homeowner, you have the option to sign and send back your mortgage renewal letter, or shop around to see if you can get a better rate or more favorable terms from another lender. It is strongly encouraged that you work with a mortgage broker at mortgage renewal time to ensure that you get the
best rate and terms for your situation.

What is mortgage refinancing?
Mortgage refinancing happens when you decide to get a new mortgage before the term on your current mortgage expires. This means you will have to break your current mortgage early.

While mortgage refinancing in most cases will cause you to have a financial penalty by the lender for breaking your first mortgage, there are some good reasons why homeowners may choose to do this. Often people refinance their mortgages when interest rates have dropped significantly or when they
wish to access money from their home equity (to consolidate debt, pay for a home renovation, etc)

It is strongly advised that if you are considering refinancing, you do so with the help of a mortgage professional who can determine whether you will be able to save enough in interest payments to offset the financial penalty for breaking your mortgage.

Are you interested in mortgage renewal or mortgage refinancing? I can help you with both! Contact me today to set up an appointment.