Easy solutions for getting through tough financial times

By Jennifer Goldberg

No matter how much we prepare by planning, saving and budgeting, tough financial situations tend to happen when we least expect them. A recent survey by Genworth Canada found that 62 per cent of Canadians are concerned about an unexpected expense impacting their ability to pay their mortgage. Ask yourself: will you be able to protect your home in the case of an unanticipated challenge such as job loss, sudden illness or divorce?

“As soon as you know that you’re facing a life-changing event, get a hold of your lender and insurer to work out a plan,” says Rob Kirby, vice president of loss mitigation for Genworth Canada. Here’s how to ask for help when times get tough.

Reach out early

“Most homeowners don’t reach out for help because they’re embarrassed,” Kirby says. Don’t let nerves keep you from getting the mortgage assistance you need; the longer you wait, the higher your risk of missing a payment, which will negatively impact your credit rating and could result in your file going to a collection agency. “Make that call early and understand that our job is to help you find a solution,” Kirby says.  Find out if your insurer has a program that can help you establish a plan before your next payment is due. For example, Genworth Canada’s Homeowner Assistance Program is designed to help homeowners with a Genworth-insured mortgage find alternative options when difficult circumstances arise.

Tell the whole story

“Homeowner assistance is about more than just making your mortgage payments,” says Kirby. “It’s about your home and there’s usually a story behind every situation.” Make sure your lender knows all the details of your circumstance so that they’re able to offer the best plan for your needs. Writing down your story might help you remember all the specifics. Be ready to honestly discuss what happened, when the problem occurred, how long you expect the challenges to last, and how you and your family are affected.

Know your financial situation

Meet your lender or insurance representative with a solid understanding of your finances. Create a detailed budget to help track income and regular expenses, make a list of all your assets — such as RRSPs and other investments — and review your up-to-date credit report from one of Canada’s two credit reporting agencies, Equifax  or TransUnion Canada. Think about whether you might have other sources of income, such as employment insurance or disability coverage. If you’re concerned about debts outside of your mortgage, Kirby suggests seeking help from a credit advisor as well as your mortgage lender. Most importantly, learn what kind of insurance you have on your mortgage and credit cards, and how that protection could help sustain you through a tough time.

Organize your documents

Gather up all the documentation your lender or insurer might need to determine your best plan of action. These could include a letter of dismissal if you’ve lost your job, proof of insurance, information about property fees and any other homeownership documentation you have.

Ask about all your options

There are several ways your lender or insurer may be able to help you stay secure in your home during a difficult time. Common solutions include deferring payments, capitalization of arrears — which involves adding overdue or missed payment fees to the amount of your mortgage — and increasing the amortization period. “Don’t be afraid to ask lots of questions to find the best option for you,” Kirby advises.

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How to create a debt repayment plan

Achieve the homeownership dream sooner