When you can’t pay your mortgage payments

Whether it’s because of job loss, illness, death of a spouse or divorce, there are lots of reasons you can’t pay your mortgage payments, despite your best intentions and aggressive budgeting.  If you are struggling to stay above water financially, it’s not just good money management to take control of your situation. It is essential to your financial health.can’t pay your mortgage payments

“Although being in a situation where you can’t pay your mortgage payments is extremely stressful, you don’t have to panic. There are a number of solutions available to you. You’ve got to step up and take control of the situation to determine what your options are,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.

“The inclination is for people to try to avoid the problem hoping that things will change. Even though it may seem impossible or overwhelming in the moment, being proactive may not only help turn your current financial troubles around, it may help to set you up for success in the future,” says Schwartz.

The first step is to know what your options are. Here are some steps to make if can’t pay your mortgage payments:

Speak up

You may be embarrassed or extremely anxious if you can’t make your mortgage payments however take control before things get worse. If you know that you can’t make your payment, your first step should be to talk your broker or lender.

This accomplishes a few things. First, it lets you tell your side of the story (e.g. explain why you can’t make the payment, etc.). Second it lets your broker/lender inform you of your options. Many people are not aware there are often features built in your mortgage that will let you miss a payment or two without penalty, but you need to make arrangements before you fall into arrears.

Third, if your inability to pay your mortgage is related to something more long term (e.g.you’ve lost your job or other income interruption) you may be able to alter your mortgage payments accordingly, depending on how much equity you have and other factors.

Don’t forget the taxes

Many people focus on the mortgage payment itself and forget to also consider property taxes and any condo or common fees. Another fact that people don’t know is that if these accumulate, they gather interest and often end up in a lien against your property. What that means is that the bank (through your mortgage) and your municipality (because you owe back property taxes) each get to have an interest in your property ahead of you, which is problematic when you go to sell.

Mortgage is too much to handle

If your current mortgage is beyond your means, and you can’t refinance accordingly, you have a few options. You could consider selling and downsizing.

You could also see if you have options to help boost your income to pay your mortgage. What about taking in a roommate, renting out parking space or even getting a part-time job to make up the difference?

Are you struggling to make ends meet?  Is there never enough to cover the bills? The first step is to take charge of your debt load. To get started, call one of our trained credit counsellors at 1-888-294-3130 or visit our free online debt analysis.

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