If you are having difficulty making your mortgage payments or soon will be, the most important first step is to get in touch with your lender as early as you can. It can be tempting to want to conceal your problem for as long as possible, but that’s almost never the best strategy. With early intervention, there may be options available to you. Your mortgage lender doesn’t want to see you default on your mortgage; they’d much rather help homeowners find a way to keep their home.
For mortgages insured by the Canada Mortgage and Housing Corporation (CMHC), they have identified several tools available to help you ride out a period of financial uncertainty. Sagen also has a Homeowner Assistance Program designed to help homeowners who are experiencing temporary financial difficulties that may put their mortgage at risk. Possible solutions include:
- Your lender may be willing to offer a temporary payment deferral, or other flexible options for short-term relief. If you’ve made any lump-sum payments against your mortgage in the past, or if you’ve been on an accelerated payment schedule, that history can help.
- You may be able to extend your amortization period to reduce your monthly payments. You can shorten the amortization again later if your circumstances change.
- If you’ve missed a few payments already, you may ask if the lender is willing to add them to the mortgage balance and extend the payment period accordingly. Best, however, to start talking before you start missing payments!
- A special payment arrangement unique to your situation may also be possible.
The federal government has developed the Canadian Mortgage Charter to help Canadians with mortgage payment difficulties. This Charter outlines clear expectations for how federally regulated financial institutions should assist Canadians facing financial difficulty with the mortgage on their primary residence. These financial institutions are to provide options and support to help homeowners manage their mortgage payments and maintain their homeownership.
If you are in Brampton, Toronto, or the GTA and find yourself adding too much credit card debt, or borrowing to make mortgage payments, then let’s have a conversation. As an independent mortgage broker, I work for my clients and look out for their best interests, not the lenders, and I know what the lenders are after. I am a very good listener and am here to help at anytime.
