Mortgage Debt Help & Advice

Mortgages are loans provided to buy a home. These are secured against the property and are paid over a long period of time. You then have full ownership once it has been paid in full plus interest.
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Overview

Mortgages are secured loans that are often essential when buying your home. Figures posted by Canadian Bankers Association (CBA) show that 11,239 Canadians are in arrears with their mortgages. The mortgage provider Super Brokers presented statistics that showed that 21.6% of Canadian residents apply to their company for a mortgage each month. The report also showed that 14.2% apply for a refinance/debt consolidation mortgage and 10.2% will apply for a mortgage renewal.

Mortgage debt has been on the rise for some time now, caused by a multitude of supply and demand factors in the housing market. House prices have doubled within the past decade, resulting in the demand for buyers to borrow more to fund their homes.

Interest rates have been low for years, making it cheap for people to borrow money, but ever rising rates and changes to the economy can often be a factor for many as they watch their mortgage payments going up and up.

An article posted by the Star Business Journal showed that the debt ratio between income and debt level seems to be in an ongoing cat and mouse chase. Income has risen be 1.1 % while household credit market debt rose by 1.2%, meaning that the more people earn, the more they seem to borrow.

In 2017, Statistics Canada stated that the volume of household credit market debt increased to 167.3% of attuned household disposable income and the total household credit market debt amounted to approximately $2.029 trillion in the final financial quarter of 2016, with mortgage debt making up 65.5% of this.

CBA state that banks are taking more and more measures to avoid residents falling into debt with their mortgages, changing their standards to ensure that people only take on a mortgage they can manage comfortably.

 

 

Overview

Canadian Bankers Association (CBA) show that 11,239 Canadians are in arrears with their mortgages

How Mortgage Arrears Can Affect Your Life

A Mortgage is secured against your home, so missing payments is not something you want to do. Not paying your mortgage can have a severe impact on a person’s life in numerous ways.

Personal Finances

Naturally, anyone who struggles to pay their mortgage payments is undoubtedly going to experience financial hardship. This could range from having to cut back on certain luxuries that you feel you can live without to ending up with no money left to pay your priority bills.

For most, your house comes first so in most situations people have to forgo certain bills in order to keep their home, often leaving them no choice but to take out loans, overdrafts or a credit card just to get them to the end of each month. This can cause people to fall into a downward spiral of owing more money than they have coming in.

Mental Health

Mental health is a big subject in the current world, and understandably the stress of making sure you make payments on your house is going to affect you mentally. Mortgages are considered a priority bill with a risk of potentially losing your home if you can’t keep up payments.

Mental health charity, Mind, have linked the feeling on insecurity about your home to feeling constantly stressed, anxious, panicked or depressed. For those who already suffer from mental health issues it becomes more difficult to be personally responsible. In some cases, people become so anxious about their situation that they don’t feel able to contact anyone about it, causing them to fall into a vicious cycle.

Relationships

It is well known that financial troubles often cause the break down of relationship. If you co-own a home with your partner or a family member, financial struggles can lead to repeat arguments. This will often result in the topic becoming taboo and the problems escalating.

A survey released by SunTrust Bank showed that 35% of participants said that finances were the main reason they were suffering strains in their relationship. Having to cut out luxuries to afford your mortgage repayments can also lead to spending less time with the people you love because you simply cannot afford to.

Warning Signs

If you are having financial struggles relating to your mortgage, the signs below will likely be all too familiar to you:

  • Missing payments on other priority bills such as utilities
  • Consistently leaving yourself short for necessities such as food or clothes
  • Experiencing anxiety or stress over the consequences of not making your payments
  • Using further debt such as a credit card, loan or overdraft to get you through each month
  • Avoiding having a conversation about your struggles

It isn’t always easy to spot signs in others that they may be struggling, but if you know someone who finds it hard to pay their mortgage you may notice the following:

  • They don’t attend as many events with friends or loved ones
  • Keeping their finances more private (if they normally discuss this freely)
  • Having multiple loan and credit card or a large overdraft
  • Appearing stressed or anxious for no apparent reason
  • A lack of amenities within their home
  • A noticeable shift in a relationship (if you live with someone)

If you are unsure of where to go next, your mortgage provider may be able to offer you some help. Companies such as Genworth offer a ‘homeowner assistance program’ to guide you and help you keep your home whilst you sort out your finances.

The fear of losing your home can be draining and everyone will have a different prospect on this. The following are some steps you can take to try and gain back control of your finances.

Better Out Than In – Opening up to someone you trust such as a friend or family can help you find the support you need to tackle the issue head on.

Seek Advice – Speak to your mortgage provider to discuss options to try and bring your payments down to ease the stress you are under. They can also provide money management advice to help you budget.

Mortgage arrears can impact your life massively, but here at Money Advice Canada our main goal is to help relieve your stress. Our non-judgmental experts will work with you to find the solution that will work best for you.

Warning Signs

Not paying your mortgage can have a severe impact on a person’s life in numerous ways.

How we can help you with your debt?

You’re on your way to resolving your debt problems, this is what will happen next.

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We will then run through all of the options available to you and advise you on which is the best option for you
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We will then help you put the debt solution in place that will help you get back on track

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