Late mortgage payments are not a fun topic on top of the pandemic that has been a source of worry for people in a variety of different ways. It has brought up health concerns, anxiety increases, financial concerns and much more. Inflation is up to 6.8%, gas prices are soaring drastically, and the cost of living seems to be exploding with every passing day.
With these concerns Canada is seeing more and more people choosing between paying off a bill or eating a meal. With these issues, mortgage payments are becoming a struggle for people to keep up with.
We want to assure you that lenders like banks and credit unions do not want to take your house away. If you know that you are starting to be on the brink of missing your mortgage payments it is best to go talk to your lender about your situation as soon as possible.
It may surprise you, but many lenders will present you with other options that could help with your financial situation. Unfortunately, if you do miss a mortgage payment without a discussion with your lender, you could be only weeks away from losing your home.
What are some of the options you have?
An option you could do is refinance your mortgage. This would bring down your monthly payments significantly in the short term. Likely how this would look is you would extend your mortgage’s amortization period so that you would pay less a month over a longer period of time. Just because you choose this option does not mean you can not pay it off by the time you want because most mortgages have early payment options where you can pay your mortgage down faster when you happen to come into some extra cash, such as a tax refund or inheritance.
Another options depending on your situation is changing a mortgage with a variable rate to one with a fixed rate, delaying a foreclosure to assess your choices, selling your house or being referred to a trustee in bankruptcy.
Are you all alone?
No not at all, a lawyer named Maria Grande who has represented banks and credit unions in these types of situations has noted that there has been an uptick in recent months in mortgage sale proceedings in her law practice.
With mortgages maturing, interest rates climbing, and employment challenges persisting, it’s a trend that could intensify throughout this year and into next year.
It is important to understand that you are not alone. This period of time is not easy and between different worldly events such as the pandemic and the war in Ukraine, many things have changed leading to the increase in gas prices, the rise of inflation, and the uneasiness of the real estate market.
Recently the Bank of Canada raised the benchmark interest rate to 1.5%. It has already created changes and we continue to update our rate everyday on our website. We are anticipating more changes in the coming months and we will keep you updated via social media.
It is important to understand that lenders are not your enemy and they are willing to help within a reasonable means. We recommend reaching out right as you are starting to feel panicked as being proactive is always the best solution.
We are also here to help at any time. Please send us an email or give us a call and we will be happy to discuss potential options that your lender could present you and to give you advice for how to enter that conversation with your lender. A home is such an important part of everyday living and to understand these potential proactive solutions is the first step in keeping yourself accountable and safe.