If you are having trouble making your mortgage payments each month, you might be exploring various options and looking for an answer to your problem – “ I can’t pay my mortgage what do I do?”. Most people do not plan on missing any of their mortgage payments, however, there are a number of unexpected situations that can happen to you such as; you cannot mange your debt load, divorce, loss of your job, illness or a short-term or permanent disability that may prevent you from working or any other unforeseen financial situations that may arise that impact your ability to make regular mortgage payments.
- We are a well established Real Estate Investment Company that specializes in helping people who are experiencing difficulty paying their mortgage payments each month. Our Company, GVC Property Solutions Inc. (GVCPS), can provide you with immediate monthly cash flow management solutions to unmanageable or unwanted mortgage payments along with protecting any equity you may have in the property and protecting your credit. If you are looking for a solution to your problem – I “ can’t pay my mortgage what do I do?”, contact us.
If you are experiencing short term financial difficulties or long term financial difficulties due to any reason and struggling with your mortgage payments and as a result, missing your mortgage payments, foreclosure will be inevitable. There are alternatives to foreclose that are available to you when you act quickly at the first sign of financial difficulty. The key is to know what your options are as well as taking immediate action when the unanticipated happens.
“I can’t pay my mortgage what do I do?” can be an overwhelming experience leaving you feeling uncomfortable and unsure of what to do. By following these three simple steps, you can make a big difference in resolving your financial difficulties:
1) Talk to your mortgage professional
- To increase the chance of successfully managing your financial situation through early intervention, call a mortgage professional at the first sign of financial difficulty and communicate that I “can’t pay my mortgage what do I do?” Our Company, GVCPS, has a team of professional mortgage consultants who have extensive hands-on experience that can help you with your mortgage payment difficulties and help you get back on track with your mortgage payments.
2) Clarify your financial picture
- In order to help your mortgage professional as well as yourself fully understand your financial situation, prepare a detailed list of your financial obligations including any credit cards, loans, household bills with the amounts owing and their due dates. Be sure to include information about your current income, savings accounts, investments, and any other assets.
3) Stay informed
- The more information you have at your disposal on managing your finances, the easier it will be to make the right decisions. Take Charge of Your Debts is an online tool from the Government of Canada that is designed to help borrowers lunderstand debt problems and includes information on making a budget, budget counselling, collection agencies, credit, and credit repair. To view this tool, log on to www.ic.gc.ca (Industry Canada) and search for “Take Charge of Your Debts”.
With early intervention, cooperation and a well executed plan, this can help you prevent foreclosure, will help you get your mortgage payments back on track and will help protect your credit from being damaged any further from previous mortgage payments that you have missed.
When you are in the situation I “can’t pay my mortgage what do I do?”, you may need answers to the following questions:
1) I “can’t pay my mortgage, what do I do?” Will my lender help me resolve my financial difficulties to get my payments back on track or will my lender just foreclose?
In most situations, your lender doesn’t want to repossess (take back) your property. (A lender can be a bank, credit union, insurance company, private individual, or loan company.) Foreclosure can be a long and expensive process for your lender. They would rather have you get your payments back on track and keep paying them.
But if you default and do not get your payments back on track after your lender has given you a second chance, your lender will take legal action to repossess or sell your property through foreclosure.
2) I “can’t pay my mortgage” How many mortgage payments can I miss before my lender starts the foreclosure process?
When you default (don’t make a payment) on your mortgage, you don’t automatically lose your property. On default, your lender has the right to accelerate (speed up) your mortgage contract. This allows your lender to claim the full balance owed on your mortgage debt plus interest and other costs, even though the mortgage term hasn’t yet expired. Your lender can use the legal process of foreclosure to repossess (take back) your property or sell it to pay the mortgage debt.
As soon as you miss a mortgage payment, most lenders act quickly. They often will either call you and/or send a reminder letter to you first in regards to your missed payment. If your lender doesn’t hear from you or if your lender does not receive your missed payment after that, the lender’s next step is to send you a demand letter. In BC, your lender or their lawyer must send you a demand letter before starting foreclosure proceedings.
The demand letter must state exactly what you owe, and that:
- you have to pay a certain amount by a certain date to catch up on arrears (what you owe) to reinstate (restore to good standing) your mortgage, or
- you have to pay the whole amount you borrowed (not just the arrears) plus daily interest and other expenses to redeem (pay off) your mortgage
The exact requests in the demand letter depend on the wording in your mortgage and what your lender wants to do. If you don’t do what the demand letter asks, your lender can start foreclosure proceedings in court by filing a BC Supreme Court form called a petition. Your lender will serve you with (give you) a copy.
You (the respondent) can respond to a reminder or demand letter by doing one of the following:
- Solve the problem (by reinstating or redeeming the mortgage)
- Go to court (after you receive the petition — to fight the foreclosure, to get more time, or to cooperate)
3) I “can’t pay my mortgage, what do I do?” What will happen if I do nothing?
You may want to just ignore the demand letter from your lender, but be sure you know what the consequences are first. Doing nothing not only has serious consequences, this will also ruin your credit.
You can live in your property without making mortgage payments while the foreclosure proceedings are going on. This could take several months or longer. But it also means that; you don’t get any say in the court proceedings, which will go ahead without you, you may get little or no notice if the property is sold, or if you have to move and you may have to leave your property much earlier than if you had appeared in court
The court may order your property to be sold. If the money from the sale doesn’t pay all of your mortgage debt, your lender will have an enforceable judgment (court order) made against you for the shortfall (remaining amount). Your lender can try to collect this from you for up to 10 years.
It’s very important that you talk to your mortgage professional about your options as foreclosure can be prevented if you take immediate action at the first sign of financial difficulty that impacts your ability to make regular mortgage payments. Contact one of our mortgage professionals at GVCPS to find a solution to your financial difficulties.
The following options may also help you if you are in the situation – I “can’t pay my mortgage what do I do?”:
You can pay off your whole mortgage with one lender by getting another mortgage from another lender (refinance). The new mortgage has to be big enough to pay the other mortgage plus any costs that you owe.
Redeem the mortgage
If your mortgage term has ended, you can do one of the following to pay your lender:
- get a new mortgage from another lender (refinance), or
- sell your property yourself
You have to pay off the whole amount you borrowed plus daily interest and other costs. You should know beforehand what those costs might include.
Reinstate the mortgage
If you missed making some payments but think you can manage paying regular mortgage payments in the future, call your lender right away. Try to work out a way to reinstate your mortgage. This means you pay all of the outstanding mortgage amounts to bring the mortgage back into good standing. You also have to pay anything it costs your lender to collect from you, and may include legal fees. You can reinstate a mortgage if the mortgage term hasn’t expired and your lender agrees to reinstatement. Most lenders don’t want to own buildings. Lenders would rather have you keep the property and keep paying them.
Consolidate your debt into one easy payment
, home equity loan or line of credit.
Sell your property
You may want to sell your property right away and pay your lender if:
- you can’t reinstate your mortgage
- your property is in good condition and can be sold
- your property is worth at least as much as the amount you owe your lender (plus any other mortgage or judgment registered against your title), and
- you don’t want to or can’t get a new mortgage
You reduce the legal costs and interest you have to pay if you sell your property as soon as possible. This option may be more attractive if you have equity in the property.
If you are in the situation, I “can’t pay my mortgage what do I do?” contact our Company, GVCPS. We are a well established real investment Company that buys houses, townhomes and condos quickly. We also take over mortgage payments and the property associated with the mortgage. We understand the stress and hassles that you face when you are experiencing unmanageable or unwanted mortgage payments, experiencing difficulty selling your property through traditional methods or when you just need relief from your property situation for any reason.
We don’t know how many months you’ve been trying to sell or have been looking for a solution to your situation. Don’t procrastinate. Don’t let your property situation become a liability or a burden. Contact us to discuss your situation in more detail and what solutions we can provide. We have handled hundreds of purchase situations and have helped many people facilitate a non-stressful real estate transaction.
Canada Mortgage and Housing Corporation
Law Foundation and Legal Services Society of BC