Job loss and your mortgage

Losing your job, having your family income reduced for an unexpected reason, a health issue or life event can be traumatic.

It's especially traumatic if it’s unforeseen and you aren't prepared for the financial difficulties that might occur, including not being able to make your mortgage payment.

The first step is to take action and put a plan in place with your mortgage lender by working together for a managed solution.

At the first sign of difficulty, call your mortgage lender directly or speak with a mortgage broker.

Letting them know right away that you are having a challenge will open the lines of communication with all parties involved. The worst mistake would be not speaking with them.

If you have an insured mortgage, there may be solutions from your mortgage lender and they will work with you.

A mortgage broker may have information on potential options, but both your mortgage lender and your mortgage broker need a full understanding of your financial situation, so you should be prepared before giving them a call.

Make sure you have a list of all of your financial obligations, including what you owe on credit cards, loans and other household bills and when they are due.

Also have information ready about your current income, savings, investments and any other assets.

This information will be required to help determine the best course of action.

Some potential temporary solutions to solve the problem might include:

  • A temporary short-term payment deferral might be a solution if you have made some lump sum payments or have an accelerated payment schedule.
  • Extending your amortization back to the original schedule to lower your monthly mortgage payments.
  • Adding missed payments to the mortgage balance and spreading them over the remaining repayment period.
  • Offering a special payment arrangement that might be available at your current mortgage lender.
  • Modifying the mortgage agreement to reduce the contract rate to reflect current interest rates which might lower the monthly payment.

Other courses of action might include the following:

  • If your cash-flow issue is only temporary, there could be some other solutions available, such as a second mortgage refinance to consolidate debts and reduce your total monthly payments.
  • A visit with a bankruptcy trustee to discuss the options for eliminating unsecured debt via a consumer proposal or filing for bankruptcy.
  • Selling the home to pay off all outstanding debts and start fresh.

The first course of action is to reach out to your mortgage lender or a mortgage broker at the first sign of trouble. Don’t leave it until after you have missed payments as then it might be too late and will eliminate some of your options.

If you would like discuss mortgage matters, call 888-561-2679 or email me.

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About the Author

April Dunn is the owner and a Mortgage Broker with The Red Door Mortgage Group – Mortgage Architects. She has been assisting clients to purchase, refinance or renew their mortgages for over 20 years.

April has experience as a Credit Union manager, a Residential Mortgage Manager with a large financial institution and as a licensed Mortgage Broker. By specializing in Strategic Mortgage Planning she has the tools available to build a customized mortgage plan, with the features and options that meet your needs.

April provides a full range of residential and commercial mortgage financing options for clients all over the province of British Columbia and across Canada through the Mortgage Architects network.

Contact e-mail address: [email protected] or by phone at: 888-561-2679.

Website:  www.reddoormortgage.com

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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