Archive for Category 'Mortgage', page 4

Question: If i want to declare personal bankruptcy but do not want to include my home, can i do this?

Answer: When you go bankrupt you must disclose all of your assets.  If you own a home with no mortgage, you will probably lose your house as a result of the bankruptcy.  However, if your home is fully mortgaged, it may be possible to keep your home if you go bankrupt.  The laws are different in each province, so we suggest you contact a bankruptcy trustee to arrange a free initial consultation to review your situation in more detail.

Questions: How long do you need to be employed with a particular job before that income would be considered as part of a debt consolidation loan using home equity?

How do they determine how much loan you would qualify for using your home as equity? Would it be 75% of the equity in the home?

How much income do you need to show for the loan if your house is the collateral? Is the income just based on your ability to pay the second mortgage?

Answer: Each lender is different.  In general, most lenders would like to see at least one year at a job to indicate stability.  75% of the value of the home is the normal standard for a mortgage; once you get over the 75% limit lenders will charge a mortgage insurance fee, which increases the cost of the debt consolidation loan or mortgage.  As for your income, most lenders don’t want to see more than about 35% of your income devoted to debt payments.

Each situation is different, so we suggest you contact a mortgage broker for a detailed review of your specific situation.

Question: is there any problem to refinance a mortgage to the bank while you are in a consumer proposal?
and it is posible to add a co-signer for loan even though he filed a personal bankruptcy? thanks

Answer: It depends on what you mean by re-finance.  If your existing mortgage matures while you are in a consumer proposal, in most cases the bank will automatically renew it.  If you want to increase your mortgage, or get a new mortgage while in a proposal, it is much more difficult.  A co-signer may help, even if the person was bankrupt.

For more details, listen to our radio show about mortgages and refinancing.

Question: Can a credit card company who is not receiving full payment each month take our home? They currently want over $1000 a month and we can only pay $200. Our mortgage (from another bank) takes the rest of our income.

Answer: The only way a credit card company can take your home would be if they took you court, sued you, got a judgement against you, and then went back to court to request a lien on your house as a way to enforce the judgement.  That lien would rank behind the mortgage you already have on your house, which makes it highly unlikely that a credit card company would go to the trouble of attempting to get a lien on your home.

However, if you are unable to pay your credit cards, it is likely that at some point they will attempt to obtain a wage garnishment.  If they do that, you may be unable to make your mortgage payments, which means you run the risk of losing your house to the mortgage company.

You have very serious financial problems, so we strongly recommend that you consult a financial professional immediately, such as a credit counsellor or bankruptcy trustee to review your options.  You should take action immediately if you want to keep your house.

Question: I co-own an inherited lakeshore cabin lot with my sister. Both of our names appear on the title. If I go bankrupt will I lose this?

Answer: Probably.  The answer depends on two factors.

First, what is the equity in the property?  If there is a mortgage on the property and therefore there is minimal equity, you may not lose it.

Second, it depends on where you live.  The rules vary from province to province in Canada, and from state to state in the U.S.

If there is significant equity, you would be required to pay your share of the equity to the trustee if you go bankrupt, which probably means your sister would need to buy out your half.

This is a complicated issue, so we suggest you bankruptcy trustee for more information.

Question: I co-signed for my brother on his home but now he is out of a job and can’t pay the mortgage what are my options?

Answer: The first option would be to try to help him make the mortgage payments until he gets back to work.  As long as the payments remain current, the house is not at risk.  If he has some income, perhaps from unemployment insurance, he may be able to make partial payments, and you top up the remaining amount.

If payments are not made on a mortgage, eventually the bank will foreclose and seize and sell the house.  If there is a shortfall when they sell it, you as co-signer will be responsible for the shortfall if you brother is unable to pay.

If it appears likely that he will be out of work for an extended period of time, and if it appears there will be a shortfall when the house sells, it would be prudent to sell the house now (to get the best price possible; it will be worth less with a “power of sale” sign on it) before the bank takes any further action.

Question: If I am in a consumer proposal, can I apply for a morgage?

Answer: Yes, you can apply for a mortgage.  However, because you are in a consumer proposal it will be more difficult to qualify than if you were not in a consumer proposal.  Here is a link to mortgage brokers that can help you get a mortgage, even if you are in the middle of a proposal.

Questions: If I file for either a consumer proposal or personal bankruptcy what will happen when it is time to redo my mortgage.
Ex. – current value of home – $275,000
first and second mortgage – $265,000

If filing for bankruptcy or a proposal it would be for the $45,000 in credit cards.

Can I continue to make all payments to mortgages after credit card debt reduced or gone?

Will a bank redo my mortgage when do. If so will my interest rate be affected.

Thank you.

Answer: Yes, it is possible to continue making your mortgage payments during a consumer proposal or bankruptcy.  Whether or not your mortgage lender will renew your mortgage when it comes up for renewal is up to them, but in most cases, as long as your payments are up to date, they will renew your mortgage.  It is possible that due to your  consumer proposal or bankruptcy they may increase your interest rate.

We suggest you contact a bankruptcy trustee for more information on how a proposal or bankruptcy will work in your situation, and contact a mortgage brokers for information on renewing a mortgage after a proposal or bankruptcy.