Reports say that the percentage of mortgage arrears in Canada only stands at 0.33 per cent - about one-third of one per cent-good news. It's also suggested that the number of potential home losses may rise, placing more people at the risk of losing their home--their most prized possession.
But job losses as reflected by today's economy are not the only cause for the risk of the loss of one's home. Financial difficulties may also arise from illness, marital separation, a reduction in family income and other possible setbacks.
Here's more good news. Mortgage default insurers, CMHC and Genworth Financial, offer assistance to homeowners finding themselves in financial straits. If possible, their goal is to help Canadians keep their homes rather than face power of sale proceedings or foreclosure. To achieve this, they provide lenders and homeowners with alternative and flexible solutions.
According to CMHC, any assistance programs include the need to talk to the lender at the first sign of difficulty and to keep the lender updated as the situation progresses.
Here is a summary of some of the possible solutions they offer:
- A short-term payment deferral, particularly if you have made lump sum prepayments or have an accelerated mortgage schedule.
- Extending the amortization of your mortgage, thereby lowering the monthly payments.
- Adding missed payments to the balance of the mortgage and spreading them over the remaining repayment period.
- Offering a special payment arrangement unique to one's needs.
- Working with alternatives solutions proposed by the lender.
- Converting a variable rate to a fixed interest rate mortgage.
- Genworth will even consider a partial or shared payment plan depending on circumstances.
Once again, early communication and cooperation with the lender are critical.