meeny's Blog

Home owners face a perennial refinancing decision each time the term on their existing home mortgage expires. Do you renew your mortgage with your existing bank or lender, or should you shop around to see if better rates and terms are available from another lender?

Most banks and institutional lenders will offer their existing borrowers competitive interest rates when it comes time to renew a mortgage – particularly if the borrower does a little leg work and finds out the competitive rates from other lenders. Mortgage renewal is a no-brainer for a bank’s loan officer, who is often able to shave a half-point of interest off posted rates or match the offers of competitors who are trying to entice an existing borrower to take his or her business down the street. Difficulties can arise, however, when there has been a material change in the borrower’s circumstances.

The two instances in which borrowers are most apt to run into difficulties securing refinancing from their existing lender are when (a) their employment profile or income stream has changed, and (b) when the price of their home house prices has decreased in value. While the Canadian housing market has stabilized and house prices have maintained their value and continue to grow, albeit at a more moderate rate, there are some local markets where housing prices have dropped. Moreover, there has been a general tightening in Canadian lending practices as credit markets have tightened globally due to turmoil in the U.S. mortgage and housing markets. As a result, some Canadians who have less than optimal credit scores, who have been affected by job losses and/or who have seen the value of their homes drop are reportedly facing greater than normal difficulties in obtaining refinancing for their existing mortgages.

Borrowers from banks and other federally regulated lenders are required to purchase mortgage insurance for high-ratio mortgages where the value of the mortgage exceeds 80% of the value of the mortgaged property. As a result, some homeowners who have seen the market value of their property drop below the high-ratio mortgage threshold may be required to obtain mortgage insurance from the Canadian Home Mortgage Corporation, or one of the private federally recognized mortgage insurance companies. Obtaining mortgage insurance can prove difficult in such circumstances for individuals with a bad credit history and poor credit scores.

“People with a shaky credit rating, who relied on so-called 'B' lenders for a mortgage, could be left scrambling to find a new lender if their mortgage is coming due soon,” according to Chatham, Ontario’s Daily News. Homeowners in some Ontario cities affected by manufacturing job losses and falling housing prices have reportedly fallen into the gap created when they go to refinance with federally regulated lenders who now require mortgage insurance, but mortgage insurance is not commercially available based on their financial circumstances and/or past credit history.

Home owners experiencing difficulties in obtaining refinancing, as well as savvy consumers looking to find the best rates and terms available from competitive lenders are increasingly using the services of mortgage brokers when it comes time to refinance. People with poor credit finding themselves unable to renew their mortgage is "happening quite frequently now," reports a local Chatham, Ontario mortgage broker, noting that the “market is very, very shallow right now” for people looking to refinance with poor credit.

Rather than relying on loan specialists at their local bank to obtain refinancing, home owners - particularly individuals with marginal credit scores and credit difficulties - are turning to mortgage brokers who offer a much, much wider of mortgage products from a broader spectrum of publicly regulated and private lenders. Most often Canadian mortgage brokers are able to find a refinancing solution that banks cannot offer, and are often able to offer homeowners better terms and rates for refinancing than are available from the bank that holds their current mortgage.

About the Author

Visit http://www.CanadianMortgagesInc.ca for more refinancing information from trusted and experienced Canadian mortgage brokers, or call 1-888-465-1432 for a no-fee consultation with one of our experienced and knowledgeable broker agents.

Purchasing a home is a difficulty decision in every family. Therefore, you have to consider carefully. Whether you are a first time homebuyer, or buying a second home, you need to find the right company to assist you. Find a Minnesota mortgage broker that will answer your questions and help you find the right loan for your situation.

There are numerous services that a Minnesota mortgage broker should offer you. When you find a full-service broker, you will be able to use their services for future needs that might arise. A broker that offers a high level of customer assistance will do all they can to keep satisfied clientele.

Minnesota Mortgage Broker Services

If you are tired of renting and want to settle into your own home, you will find many brokers that are willing to help you. How do you know which one to choose? Sometimes word-of-mouth is helpful, advertisements in newspapers, or reviewing websites.

The most important thing to determine in finding a Minnesota mortgage broker is the services offered, and if they are willing to work with you. When you are going to purchase a home or property, you will want to see if the broker offers you low rates, various types of mortgage programs and advice from a professional loan specialist.

Loan Options

There are different ways to finance your loan. There is the Interest Only loan program that offers lower monthly payments. You can qualify for a higher loan, and have options to pay principal and interest rate, or interest only payments for up to 10 years.

Another option is the payment plan option ARMS loan program. This is an adjustable rate mortgage program that begins with low monthly payments. The payments will increase over the first five years and the loan can be financed for up to forty years.

This may be a good time to refinance in order to reduce your payments or shorten your loan obligation. You can also combine first and second mortgages to get a better interest rate. In addition, you can convert an adjustable rate mortgage to a more secure fixed-rate mortgage.

Help With Credit

If you have had a problem with bad credit, find a Minnesota mortgage broker that will help you re-establish a good credit rating. Even if you have been behind on payments, had a foreclosure, or bankruptcy, there are brokers than can help you. They can work with companies to have you pre-approved without a credit check and sometimes provide 100% financing. Your credit score will not be further pulled down with too many inquiries.

Find a broker that will help make the loan process easy and stress-free. Look at their websites and see what advantages they offer and if their information is presented in a logical manner. Ask for professional help in solving your mortgage issues. There is a Minnesota mortgage broker waiting to assist you.