Mortgage Payment Arrears
Are your monthly financial obligations suffering due to changes in your employment status or your level of family income in recent months? Do you find yourself agonizing over which bills to pay, or not to pay, due to a limited availability of funds? Has an unexpected major expense resulted in a conscious decision to withhold payments on larger bills? And as a result of these situations, or others similar in nature, do you now find yourself in arrears on your mortgage payments and fearing that you may lose your home?
‘Arrears’ refers to the portion of a debt or loan that is overdue or outstanding whenever one or more required payment is missed. While this can certainly be an anxious and stressful financial position, it is also a situation that can be rectified and resolved with your lending institution.
Tip: Before speaking with your lender/lending institution directly, contact our Toronto mortgage brokers for expert advice and guidance on the best option or options for your particular set of circumstances.
Negotiate A Repayment Strategy
Although your lender/mortgage holder can ultimately exercise the right to seize your home in an effort to reclaim the loan, they would prefer to continue receiving your monthly installments, with interest of course, rather than engaging in the activities of repossessing and selling.
Therefore, they may be willing to negotiate a repayment plan based upon one or more of these options:
- Extending the term – Spreading the debt over a longer period reduces your monthly payment
- A payment holiday – Deferring payments for a short time to help ‘catch up’ on other obligations
- Switching to interest-only payments (short-term) – Significantly reduces your monthly payment
- Accepting a smaller, more affordable monthly payment for a specified period of time
What Are Your Other Options?
If a repayment strategy is not an option or one cannot be negotiated that is acceptable to both parties, you may consider these alternate strategies, again with the advice and counsel of a mortgage specialist:
- Obtaining a second mortgage – Sometimes, a short-term solution is all that you need
- Borrowing the money – This will alleviate the arrears but may prove to be expensive
- Unlocking a pension fund – This may be possible, one time only, in the case of financial hardship
- Capitalizing the arrears – Adding this amount to the capital outstanding on the mortgage, and paying it back over the period of the mortgage or asking for an extension to the mortgage term
- File a Consumer Proposal or Bankruptcy – For the latter, you must agree to surrender your home
To obtain more information on how you can repay your mortgage arrears, contact Natasha and her team of professionals at Mortgage Intelligence. Call us toll-free at 1-866-553-7467 ext 221 or 905-851-8871 ext 221.