If you want to reduce your monthly payments and reduce relations with your creditors and preserve your credit, you should pursue debt consolidation options that honor your obligations to your creditors, but also reduce your monthly payments.
If you do not have mortgage arrears but know that things are going in that direction, you must act quickly because your options may change once your mortgage payments are due.
Using your home is the way to consolidate the fastest and most affordable debt and lower monthly payments. You may think that your bank has already said no, but the bank is not the only option.
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There are many other lenders such as trust companies, credit unions, investment and mortgage lenders companies, even private, offering a mortgage where the bank will not.
A good mortgage broker will have access to financial resources. Once your mortgage payments are late your options will be less. Most mortgage lenders require that your mortgage payments are up to date before you extend the mortgage financing.
The only lenders that will make a concession in this scenario are lenders that offer mortgages in shares only. This means they will lend to you based on the amount of equity you have in your home, not according to your personal credit. In this case, you'll need a little more equity in your home.
If you are in this situation, the best thing you can do is take steps to solve your mortgage arrears or imminent mortgage arrears before putting your home at risk.