Foreign Property Mortgages for Canadians

International/Overseas Mortgages for Canadians

First Published: ADawnJournal.com April 22, 2010

Recently released figures suggest that Canadian households have in the past five years increasingly sought to buy properties abroad to add to their own property in Canada. Whether these properties are used for holiday purposes, as a retirement nest-egg or bolt-hole, or merely as an investment, there is a clear benefit to those who can afford it from buying a foreign property for their own reasons. In many countries, it is possible to pick up a bargain – some places will even offer up a number of properties that an assiduous saver could arguably pay for up front in cash. Between this and the comparatively inflated “First World” property markets, however, there are many places where a property can be picked up for a good price, but will still require some borrowing for a purchase to be made.

Getting a mortgage to buy a property abroad is not as straightforward, generally, as finding one to pay for a domestic property. Clearly, it is more so than it used to be – Canadians who wanted to buy foreign properties used to have to find a way around the mortgage question if they wanted to avoid paying large premiums on top of the principal. The evolution of the global mortgage market has reached a point where it is now more than possible to find the right mortgage. Due to financing guidelines it is tricky to get a mortgage in one country for the purposes of buying property in another, so this development has made a big difference for people looking to get into the international property market.

If possible you should always try to get a mortgage in the same country as the property you intend to buy. It may cause a little bit more difficulty up front, especially if there is any kind of language barrier, and if there is such a barrier it is worth getting all documents legally translated as an extra cover for you. However, being able to deal with the bank face-to-face when you are at the property and carrying out any deals connected to it will be to your advantage. As a foreign buyer you will need to provide stronger guarantees to demonstrate your commitment to the property. You may need to put up a larger deposit than a national of the country where you are buying the house or condo, but bear in mind that you are buying a piece of real estate that could cost several times more in your home country and it will not seem as big an issue.

As banking has become more and more internationalized, it may well be possible – and beneficial – to source a deal in your home country to take out a mortgage in the foreign location. Most banks will have a presence or a sister bank in other countries, and if not they will at least have some level of collaboration with banks in those countries. This can make the whole process move a lot more smoothly, and can see you secure a good-value mortgage for an excellently-priced property.

What To Do When Your Home Is Being Repossessed?

Notice Periods – Time To Run Through Your Options

First Published: ADawnJournal.com January 24, 2010

When you are having trouble paying your mortgage, the inevitable spectre of repossession emerges. Financial hardship is awful for anyone. The knowledge that you could be unemployed and not knowing where the next month’s groceries are coming from is bad enough, but when you have to deal with the idea that the roof over your head could be taken away from you things become worse still. Nobody who has experienced the situation of being repossessed, or even under threat of repossession, can ever take the payment of their mortgage lightly. The mere thought of having to move out of a home that you have made your own is too much.

However, there is a process that needs to run its course before a house can be repossessed, and if you work together with the bank who supply your mortgage then there are still options which could mean that you can escape the danger of repossession. The important thing of which you must take account is that banks generally do not want to foreclose on a house. As valuable as a house may be, and as keen as they are to protect their investment, banks set a lot of store by customer co-operation. With other forms of debt, specifically unsecured debts, one of the banks’ main fears is that customers will duck and run, leaving no trace of their whereabouts. With a mortgage, the loan is tied to the house, so the chance of a customer sneaking off with the proceeds of their non-payment is removed.

A policy of co-operation with the bank will serve you well in this respect. Rather than take the house off you, renovate any part that they consider not to be up to scratch and put it back on the market at a lower price to force a sale – all of which leaves them out of pocket – they would rather agree with a customer to refinance the mortgage to a more manageable level, creating in effect a new mortgage with a full term. You may stay indebted to the bank for longer, but you also stay in the house. If you cannot agree a remortgage or fail to make the payments, then the bank will be more likely to repossess. If they do this, they must however give a notice period.

During the course of your notice period, you have two options of any real substance. You can start looking for rental properties in preparation for the house being repossessed by the bank at the end of the stipulated period (either 35 or 45 days) or you can look for one last way to make the situation good. This may include looking elsewhere for a mortgage – which you will then use to pay off the old mortgage in full and begin to pay off anew. If you are able to demonstrate either the completion of this process or its reaching an advanced stage, the notice period can be extended or quashed, allowing you to make a new start and remain in the home you have made.

How To Manage A Mortgage

Managing A Mortgage To Your Advantage

If you are looking for a worthwhile mortgage in today’s market, it is advisable to be ready for some difficult years ahead, as the real estate market searches for stability in the wake of two years of severe turmoil. Mortgage management is more important now than it has ever been before, as there is a tendency among banks to become very nervous and panicky when customers exhibit any sign of the feckless borrowing habits that played such a large part in triggering the current global financial crisis. It is not necessarily more likely that you will be the victim of a repossession – banks are still reluctant to do this where there is any other option – but it will affect what kind of deal you can get, if you happen to be caught up in a situation where you are unable to pay.

Mortgage management begins right at the start of the mortgage period, when you first apply for the loan. The first part of a good process of mortgage management is to tell the truth on your application. There are some situations where it is possible to successfully apply for a mortgage by lying on your application and qualifying for preferential rates. Depending on the level of due diligence carried out by the lending bank, you may get away with it. If you do, however, it is important to remember that mortgage loans are frequently renegotiated, and that any information you give on your application can be checked at the source. If you lied on your initial application it is an option for the bank to sue you.

Another reason why it is simply common sense to tell the truth on your application is that although the lie may give you a preferential rate, you may still find it difficult to make the monthly payments on a big loan. If you struggle with these payments, you may be asked to provide evidence for why this has happened, and if you expose the lie at that point you are again liable to be sued.

By far and away the main aspects of sound mortgage management come, though, when you have been awarded the mortgage and are paying monthly to the account. Budgeting plays a huge part in mortgage management, and making sure that the first deduction you make from any month’s pay check is your mortgage payment should mean that you can prioritize your financial commitments – of which keeping a roof over your head must be considered the most important.

If you ever fall into financial difficulties that make the monthly payments to your mortgage difficult to maintain, it is essential that you discuss the matter with your mortgage lender. Early reporting of any problems makes for a much better chance of solving them than late reporting.

Finally, and quite literally so, if you find yourself in with a chance of paying off your mortgage in full you should take into account what the most economic way of doing this will be. Some lenders charge a surcharge for early payment, although this can be on a sliding scale and may also be negotiable. Check your terms and conditions, and discuss matters with your lender.

Mortgage Insurance-Always Read The Small Print

Mortgage Insurance Terms and Conditions

First Published: ADawnJournal.com February 28, 2010

Borrowing to pay for a house is something that can raise the hairs on the back of anyone’s neck. With a likely 25+ years’ term on the loan, there is plenty of scope for anything to go wrong and for the mortgage to end up posing you some real problems. Yet people keep doing it because, short of having substantial savings or a large windfall, there is no other way for most of us to own our own home – even if it belongs at least partly to the bank for the first quarter of a century. At the point where the mortgage is paid off in full, that house is 100% yours – something which a lot of people consider one of their proudest moments.

The twenty five years (or more) between taking out the loan and paying it off, though, is undoubtedly a long time. In that time any number of things can happen, which is why most mortgages come with an insurance package on top of the other options. Insurance works the same on a mortgage as it does with most other personal insurance packages. If death, illness or unemployment leave you struggling to pay off the mortgage, the insurance is there for the purposes of paying off the loan (or meeting monthly payments for a period) and freeing you from the financial burden on top of an already undesirable situation. Depending on the nature of the insurance and the contents of the terms and conditions, you could find that the mortgage is a god-send. The key matter as far as this goes is liability.

There are probably no insurance packages available in the world today that do not come with a list of terms and conditions that apply caveats to the insurance you are offered. If you claim on the insurance, it will pay out on the condition that none of the “small print” terms and conditions are violated. Your insurance package is likely to pay out if you can prove that you could not reasonably have foreseen the set of circumstances that necessitate the claim, and that it wasn’t your fault. In case of death, the insurance company may well ask for a medical report. Cases of suicide, or death from a long standing condition that the mortgage holder kept to themselves, can invalidate the insurance.

If health problems make it difficult or impossible for you to bring in enough money to meet the mortgage payments, it is possible that the insurance will come to your aid. Again, though, it is essential that you read the small print because if you suffered from this condition before you took out the insurance, the policy will not pay out in most cases.

Unemployment is another common reason for claiming on mortgage insurance, but this is perhaps the most laden with stipulations. Did you resign from your job? Insurance won’t cover you. Did you get fired for performance reasons? No cover there either. Were you sacked as a result of participation in industrial action? You’re not covered. The list of reasons for unemployment which actually do qualify is shorter than those which do not. If the insurance company judges you to be liable for the situation that has left you in this mess, they will not pay.

How To Get The Best Mortgage Deals

Killer Mortgage Deals and How to Get Them

First Published: ADawnJournal.com March 13, 2010

The best mortgage deals available on the market are often ones that go unnoticed by a majority of potential customers. With a mortgage market as wide as it is – even in the financial difficulties that have become a global issue at this point – there is not only an increased level of competition for the few customers who feel brave enough to go out and borrow to buy a house, but also a real sense of being spoiled for choice. Invariably, even those potential borrowers who see fit to shop around for the best deal will find themselves getting a kind of “variety fatigue” which leaves them wondering whether they shouldn’t just take the best of the several potential deals they have already seen – even if it means missing out on an unseen gem.

Reaching for the best available deal on the market means really looking for one that satisfies all your needs, one for which you will not find it problematic to meet payments on a monthly basis, and ideally one that moves to take account of changing realities so that you do not become tied to a deal which looked good three or four weeks ago, but will leave you out of pocket in three of four years. There are various ways of going about this. Some people would say that you shouldn’t spend too long looking – just find a deal that you are happy with, which looks strong today and will maintain that strength, and not worry too much about whether you’ve missed a better deal. Others disagree.

The message from the latter group is that you owe it to yourself to get the best deal possible. Sure, a good mortgage deal will be beneficial for you, but a great one will continue to benefit you, will benefit your family and will continue to serve you well for the life of the account. You may well find at the end of it that you are able to pay it off in full earlier than you had expected. How do you find such a deal, though, if you do not know what it is or where to find it? How do you look for something which you don’t even know exists?

The first port of call is to check mortgage calculators and comparison sites. The Internet has seen a rapid rise in both of these over the course of recent years. The Internet is truly a consumer paradise in many ways because of the vast range that it covers. If you look closely enough in enough places, there is virtually no financial deal that is not covered on the World Wide Web. Trawling a number of comparison sites – ideally two or three, or even more – will give you an appreciation of what kind of deals are being offered. If all of the deals you see are from banks you are fully aware of, however, it may also be worth hitting the streets to see what is on offer from the smaller, more independent banks. With greater freedom to set their own rates, they may just throw up the great deal you were looking for.