Defaulting on your mortgage loan can have serious consequences. If the borrower violates the terms of the mortgage loan or fails to make regular payments, the lender has many strong remedies it can exercise to protect its investment. By making your regular payments on time and following the terms of the loan, you will avoid potential foreclosure and a lot of heartache.
What are mortgage arrears?
As in any contract, your mortgage contract will describe all the terms and conditions related to your loan, which are specific to you. You fall behind on your mortgage when you start to fall behind on your payments – for example, by missing a mortgage payment. Missing mortgage payments go against the terms agreed upon when the loan was originally taken out and should be avoided whenever possible. Any violation of the terms and conditions by the borrower may prompt the lender to take corrective action.
Why do people get behind on mortgage payments?
- not making your regular mortgage payment on time
- canceling or allowing your home insurance to lapse and then failing to renew or obtain a new policy
- failing to pay and maintain property taxes/amenities/strata fees (if applicable)
- not respecting municipal orders and regulations
- failure to maintain the property in a good habitable condition
- use property for illegal activities
Considering the above reasons, one may find oneself in a difficult situation. However, there are also many options the borrower can consider if they default on the mortgage contract.
How to get out of mortgage arrears?
- work out a payment plan outside of the normal payment schedule with the lender. You can negotiate with the lender and agree to suspend payments for a short time or make partial payments in the meantime.
- refinance the mortgage with another lender and pay off the current lender
- list the property for sale
- provide additional security acceptable to the lender
Since mortgage financing makes up the majority of real estate transactions, challenges and problems are more likely to occur. Borrowers face high unemployment, failing businesses, recessions, and many unexpected life events that can lead to financial turmoil. There are several solutions for borrowers who are late on their mortgage.
Private Mortgage Lenders for Bad Credit
It would be wise to speak with a mortgage broker to learn about your options if you are facing mortgage arrears and impending foreclosure. If you have bad credit and are looking for private mortgage lenders and live in Surrey, Vancouver, Abbotsford or elsewhere in the Lower Mainland, call us today at 604.620.2697. You don’t have to do it alone – let’s discuss your options.