Bad Credit Loan Mortgage Re

Not paying mortgage will result in kind of attention you don’t ...

Q: Ive had a home-equity loan for eight years. Six months ago, I called the mortgageservicing company to ask for the payoff. The toll-free number on my bill wasnt working, so I decided to stop paying on the loan to force them to contact me. Still, no one has called. What should I do? A: When you stop paying a mortgage, several bad things happen fairly quickly: You trash your credit history and credit score, late penalties and fees are tacked on, and you can trigger "universal default" on your credit cards. If youre carrying creditcard debt, your interest rate could skyrocket. No one is going to call you back from this mortgage-servicing company until its too late. The next call you get will be from the foreclosure department, telling you that it is starting foreclosure proceedings. Or you might not even get this call.

Building a Good Credit History Is More Important Than You Think

If you were ever turned down for a loan, charged higher interest rates, or had a landlord refuse to rent you an apartment, it could be because of your credit history.

Your credit history may make you appear to be a bad risk, or indicate that you sometimes have trouble making your monthly payments. Maybe you never had credit before, so there is no track record of how you pay back money you borrowed. Or maybe - without knowing it - you were a victim of "identity theft", which affected your credit rating.

Many Canadians - especially newcomers to Canada or students - who do not have much experience with credit would be surprised to learn how crucial it is to build and maintain a good credit history if you want to qualify for a mortgage or other types of loan.

To help consumers understand the ins and outs of credit, the Financial Consumer Agency of Canada (FCAC) has developed a useful booklet called Understanding Your Credit Report and Credit Score, which you can obtain at no cost by calling FCAC, toll-free, at 1-866-461-3222, or by visiting the Agency's Web site: www.fcac.gc.ca

Know how credit reporting works

Three major credit-reporting agencies in Canada - Equifax, Transunion and Northern Credit Bureaus - keep a file on consumers, called a "credit report".

Low rates forcing mortgage fee rises

According to a report from MoneyExpert.com, the cost of applying for a mortgage has risen by almost a quarter in the last 12 months alone. The research suggests that mortgage lenders are trying to remain profitable whilst at the same time provide market-leading products to customers when even the rates on bad credit mortgages are relatively low. The average fixed-rate home purchase loan arrangement costs £494, up 22 per cent, MoneyExpert.com says, while the arrangement fee for a discount mortgage currently stands at £407 – an increase of 15 per cent from 12 months ago. "Borrowers need to budget for application fees when they take out a mortgage," said Sean Gardner, MoneyExpert's chief executive. "What you believe is a cheap deal saving you, for instance, £100 a month won't look quite so good when you add on application fees." Mr Gardner noted that because the base rate of interest had remained unmoved for almost a year, mortgage providers were looking at new ways to maximize their profits on fixed-rate products.

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