As discussed in my previous post, this morning I appeared live on 570 News for a one hour Ask the Experts broadcast with Theresa Yates, a mortgage consultant with Mortgage Intelligence in Kitchener, Ontario who specializes in finding mortgages for people with less than perfect credit.
The title of the radio show was What Can You Do If You Own a Home and Have Money Problems, and Theresa made a number of good points on the show.
She commented that if you have a lot of high interest rate debt, like credit cards, but you also own a home that is worth more than is owing on the mortgage, it may be possible to borrow against the value of your home to reduce your monthly payments. This makes sense, because mortgage rates are a lot less than the 18% to 25% you might be paying on credit cards. Refinancing is obviously a better alternative than going bankrupt, which is why if you own a home with substantial equity we always suggest considering the re-financing option.
She also mentioned that it is possible to get a mortgage very soon after you have been discharged from personal bankruptcy, provided you have at least a 10% down payment (more is better) and a good source of income. That's good news for people who want to rebuild their credit as soon as possible.
She even discussed the possibility of re-financing a mortgage as part of a consumer proposal. There are a number of conditions that must be met, so a consultation with Theresa is necessary to see if you qualify.
We closed the show by commenting that there are many different solutions to financial problems. A consumer proposal or a personal bankruptcy may be a solution, but if you own your own home re-financing your mortgage may also be a step towards solving your financial problems.
For more information, you can e-mail Hoyes Michalos, or you can contact Theresa directly at www.mortgageintelligence.ca/theresayates.
I am pleased to announce that the professionals at Hoyes Michalos & Associates Inc. will be participating in a unique radio event: the Summer Survival Plan series.
We are constantly asked how to deal with collection agents, or what to do about tax debts, or how you can keep your home, even if you are having money problems. This special live radio series is designed to give you those answers.
 This Saturday, July 14 at noon, we will be appearing live on 570 News in Kitchener for the first of this six part series. Tune in to 570 on your AM dial, or listen live to 570 News on the internet. The shows are live, so feel free to call in with your questions.
The shows will air live Saturday July 15, 22, 29 and August 12, 19, 26 from noon to 1:00 pm. For a list of show topics and full details, visit the Hoyes Michalos
radio schedule. If you don’t want to ask a question on the air, e-mail us a question and we will do our best to answer it on the air.
That's three Saturdays in July, and three Saturdays in August, live on 570 News.
I had a very informative meeting this morning with Heather Cudmore, the Manager of Credit Counselling at the Catholic Family Counselling Centre here in Kitchener.
Whenever I meet with anyone in Kitchener who is having money problems, I always explain that there are many options for dealing with debt. Of course I talk about consumer proposals and personal bankruptcy because that's what we do, but I always also mention credit counselling as a bankruptcy alternative.
Credit counselling involves meeting with a credit counsellor to review your monthly budget, and work out a plan to deal with your debts. If budgeting alone isn't enough, they can also help you with a Debt Management Program, where they contact your creditors and work out a repayment plan on your behalf, often with significantly reduced interest.
Catholic Family Counselling is the only not-for-profit credit counselling agency in Kitchener, and they are the only accredited member of the Ontario Association of Credit Counselling Services in Waterloo Region, so if you want a credit counselor, they are a great place to start. They are located at 400 Queen Street South in Kitchener.
They are a non-denominational agency, so you don't have to be Catholic to use their services.
Heather told me that the average person they help has $25,000 in debts. Their average client is between 30 and 50 years old, and most of them are employed, but having trouble making ends meet.
Catholic Family Counselling has great success helping people deal with credit card and bank debt, and they can also work out plans to deal with payday loans and even Revenue Canada debt.
Ms. Cudmore stressed that she sees her role as someone who provides options. Like me, her counsellors explain all options, including budgeting, debt consolidation, credit counseling, proposals and bankruptcy. She will give advice to clients, but she will also encourage people if they have any doubts to get a second opinion from friends, family, or other professionals.
I have always been impressed by the fact that they deal with their clients in a non-judgmental way; their primary concern is to find solutions to your money problems. And, as a full service counselling agency, they can also help with problems not related to debt.
Heather also makes frequent appearances speaking to groups. She has also appeared on the radio many times in the past; click here to hear her talk about credit counselling.
To reach Catholic family counseling, call them in Kitchener at 519-743-6333 and ask for credit counseling, or contact them through their Catholic Family Counselling Centre webiste.
I had an interesting meeting this morning with Theresa Yates, a Mortgage Consultant with Mortgage Intelligence here in Kitchener. Every week I talk to people who own a home, but have too much credit card debt, and they don't know what to do.
For some, the answer is to sell their house, and use the proceeds to repay their other debts. Unfortunately once you sell your house you no longer own a house, and in some cases in Kitchener it costs just as much to own a home as it does to rent, particularly if you have children or pets.
Theresa explained that there are two other options.
First, if you have equity in your home, it may be possible to re-finance your first mortgage, or get a second mortgage, and use that money to repay your other debts. If you are paying 18% to 25% interest on your credit cards, and can get a mortgage at say 6% or 7%, this strategy makes a lot of sense. You can lower your monthly payments, and more of what you pay each month goes towards the principal, and less to interest, so you pay off your debts faster.
But what if you have $50,000 in debts, but only $30,000 in equity in your house? A second mortgage won't be enough to get rid of your debts.
The second option is use the equity in your house to do a consumer proposal. For example, we could go to the people you owe money to and offer them a lump sum payment of $30,000, in exchange for writing off the balance of your debt. Theresa has had success in the past in getting mortgages for people who then use the money to do a consumer proposal. It's a good deal for you, because the consumer proposal deals with your debts and helps you avoid losing your house in a bankruptcy. It's also a good deal for your creditors, since they get more money than they would receive if you filed for personal bankruptcy.
This is not a simple procedure. An experienced mortgage consultant is required to find the appropriate lender and make it happen.
If you have equity in your house, and more debt than you can handle, feel free to contact Theresa Yates or contact us for more information.
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