At CCF, we’re constantly uncovering new strategies to help our clients. Unfortunately we’ve found that each year, more and more banks are refusing to renew mortgages due to bad credit history, leading many to experience and become susceptible to power of sale and foreclosures.
One of the primary ways that we help clients avoid these pitfalls is through helping them apply for a second mortgage.
What is a Second Mortgage?
When a property is mortgaged, owners have the option of taking out another loan on it – hence the term “second mortgage”. Mortgage rates are much higher on second mortgages due to the fact that the secondary lender accepts more risk should the borrower be unable to pay his or her debt, than the lender on the first mortgage, who will automatically be re-compensated first.
Why get a 2nd mortgage?
A second mortgage can be a very good solution for many situations. Some of those are:
- It is considered the best option to get quick liquidity for business purposes.
- A second mortgage can help you consolidate that high interest credit card debt into a lower interest rate loan and lower monthly payment.
- Investment in another property or addition.
- Second mortgage loans are useful for starting up a new business. Your property can provide you with the access to funds required to get the new business up and running.
When it comes to choosing a lender you have a few options, and they all come with their own set of interest rates, offerings, credit score requirements, and minimum equity requirements.
The following graph from ratehub.ca does an effective job at outlining the unique characteristics of each second mortgage option:
How to Qualify
Fortunately, due to the diversity of the aforementioned options, it is not all too difficult to qualify to receive a second mortgage. Here are some of the most important factors that come into play when you are seeking second mortgage approval:
- Credit: Unfortunately, we can never escape our credit score. Your score will be a determining factor in how high your interest rates are – the lower your score, the higher your rates.
- Income: Having a steady income stream is imperative to show that you won’t bail out on making your mortgage payments.
- Equity: A second mortgage will be well within your reach if you have a large amount of equity available.
From helping to consolidate high interest credit card debt into lower interest loans, to even starting up a new business with the funds you receive from it – second mortgages are helpful in a wide variety of circumstances.
At CCF, there is nothing that brings us more joy than helping our clients with their financial needs. For those without broker experience, it can be confusing to navigate the vast landscape of mortgage options. We help decipher the world of credit, borrowing, and lending with our clients so that they can make informed decisions that empower them to take control of their financial futures.
Low Credit Score? Here’s What You Need To Do
On the pathway of life, homeownership is one of the most coveted destinations for individuals across multiple demographics. To be able to return home after a tiresome day at the office, set your keys down on the front table, and hang your coat inside a place that you can call your own is one of the most comfortable feelings.
Homeownership is a symbol of accomplishment. However, one of the major hurdles that prospective homebuyers often come into contact with is the dreaded low credit score. Having bad credit can dramatically impact your likelihood of receiving a traditional mortgage. Fortunately, there are a variety of ways you can begin working towards improving your score.
Allow our dedicated team at CCF Mortgages to break down a couple simple tips on how you can strengthen your credit score:
Ensure your Credit Statement is Correct
No credit-reporting agency delivers error free statements 100% of the time. There are a variety of reasons that credit statements can be inaccurate, and it is your job to ensure that yours is up to date and factual.
If you’re not sure how to decipher what is and isn’t correct on your statement, here are a few things to look out for once you receive yours:
- Items that are from over a decade ago. These should not be appearing on your report.
- Incorrect personal information, including your SIN number, address, etc.
- Missing credit accounts.
- Applications or accounts that are unfamiliar to you.
- Late or evaded payments reported that you know you made on time.
By simply scanning through your credit report, you can spot and address any errors on it that could be negatively impacting your score. If you should uncover any inconsistencies in your report, you can dispute them to your credit bureau and repair the errors!
Keep up to Date with your Payments
One of the most common ways that people fall victim to low credits scores is through delaying or missing entire payments on their cards. At the end of the day, nobody should be taking out loans that they don’t feel 100% confident they can pay off in a timely manner.
The following are some useful tips you can follow to help yourself pay off your debt on schedule:
- Set up payment due date alerts.
- Set up payment due dates that work with your income schedule, when possible.
- See if your lender will forgive one-off late payments.
How CCF Mortgages Can Help
Each and every day, our team at CCF Mortgages works collectively to help our clients find debt relief and repair low credit scores in order to make their dreams of owning a home attainable.
Interested in learning more about our services? Contact us today!