Supported by
The Canadian 
Construction
Industry

Corporate Member

The Canadian Association of 
Accredited Mortgage Professionals

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Bad Credit? 
...you're not alone!

Debt Distribution
& 
Debt Consolidation

Although we're constantly reminded by the media how consumer debt throughout Canada has reached an all-time high, the major problem is not necessarily the amount you owe, but rather the manner in which your debts are distributed.

For example, one individual can owe $20,000 to a single creditor, where the monthly payment may be $500 per month (depending upon the interest rate charged.) while someone else can owe that same $20,000, but the amount may be spread out over 6 or7 high-interest credit cards and loans with payments totaling over $1200 per month.

This type of imbalance in your debt distribution can leave you "gasping for air" each month trying to keep up the payments.

As well, most people in this situation tend to be unable to afford more than the minimum payments each month. This not only keeps the total debt at the same level without reduction...it also negatively affects your credit score... even if your payments are made on time.

 

Credit Repair
& 
Rehabilitation

Repairing your credit:

Credit Repair is a step-by-step process that must be planned carefully...

..and our job is to put you on the right path. 

see mortgage refinancing

Once you register into the program, a client service representative will contact you privately to discuss your current situation with you.

There is no charge for this service. As we are supported through the residential and commercial construction industries, our role is to place you on the right path where you can immediately (or ultimately) qualify for the financing of current or future renovation purchases.

If this means your having to clean up your credit first, then we'll help you get there quickly. Through credit repair, you will be able to better qualify for conventional renovation financing or a renovation-related mortgage, whether you want the work done now or in the future.

With over 100 participating lenders to choose from, a qualified licensed mortgage specialist will arrange for one loan in which you will be able to consolidate your debts while at the same time financing your repairs or renovations (if applicable) 

Directing you to the right mortgage professional is one of the most important functions of our program. 

As with any professional industry, most individual mortgage brokers and agents remain focused on one or two aspects of their business, such as mortgages for new purchases through realtors, commercial mortgage financing, etc

As personal credit repair and rehabilitation tends to be a long-term process requiring patience and continual contact with the client, we have carefully hand-picked some of the more experienced brokers who specialize in building back up your credit score, which will eventually qualify you for conventional renovation-related loans and/or mortgages. 
Related Topic: Discount Subsidy Program

Debt Service Ratio

Debt Service Ratio:
In simple terms, your debt service ratio is defined as the relationship between what you pay each month towards debt repayment and what you earn each month.

From a lender's standpoint, this relationship will determine what monthly payments you can comfortably and safely afford toward your mortgage.

There are 2 types of debt service ratios:

Gross Debt 
Service Ratio (GDSR): 

 This ratio strictly deals with the combined monthly payments of principle, interest and taxes associated with the mortgage you are applying for. 

In addition, your monthly heating bill is normally taken into account.

Example: The monthly payments for your mortgage totals $1500 including taxes, interest and your average monthly heating bill.

Your net household income (gross) is $5,000 per month

The gross debt service ratio (GDS) is: 30% 
($5,000 / $1500 = 30%)

Total Debt Service Ratio (TDSR):

 In addition to principle, interest, taxes and heating, this ratio also takes into consideration all of your monthly payments that are primarily associated with debt repayment, such as credit cards, bank loans, auto loans, etc.

Example: 

Gross Income: $5,000 per month
Mortgage payments (as above): $1500
Total credit card payments: $500
Total auto payments: $450

Total monthly payments: $2,450

Total Debt Service Ratio (TDSR)= 49%

In this scenario, the TDSR may be too high for most institutional mortgage lenders. An alternative lender would be a better source of lending.

With sufficient equity, you should be able to refinance your existing 1st mortgage and consolidate the car loan and the credit debts. see debt consolidation
 
  see Mortgage Financing




 

 

 

 

 

 

 

 

 

 

 

 

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