One of the most important financial decisions an adult will ever have to make in their lifetime is that of obtaining a mortgage. With the fluctuations in the market and, for Canadians, with the recent changes in the Bank of Canada’s interest rate, mortgage payments can suddenly increase in size as new interest rates exceed those conditions that when first bought the loan. Dealing with these larger payments can be an intimidating prospect for those who are spending the majority of their income on their monthly mortgage payments. Thankfully, there are some options available for those homeowners dealing with increasing mortgage payments in Canada.
Taking on additional part time or seasonal employment can be a first solution to help funding mortgage payments and this will enable you to keep afloat during these trying times. Sometimes it may be impossible to do so, due to ineligibility and lack of job opportunities. Other forms of creative solutions may include also looking into payday loans depending on your financial situation.
It is always advantageous to take a look at any amortization period of the mortgage and try and examine whether it is feasible to lower the amount of money you are paying monthly. Refinancing your loan is a process of renegotiating the specifics of your loan agreement to get either lower rates or payments, if the agreement still fits the budget. This should be done carefully as some lenders will have caveats that allowing you to keep the same mortgage term or extending out the amortization period which may mean you pay more in total payments in the long haul.
When renegotiating the terms of your mortgage, one should investigate creative ways of adding to the down payment with other forms of financial resources. This can be secured with gift money from parents, payroll advance loans, POS discounts, etc. All these solutions can provide the necessary buffer for more favourable repayment terms you can afford and manage.
Take caution on the trade-offs of the increased payment size as it will likely lead to heavy lifestyle changes from your end from having to cut back on unnecessary costs. So instead of travelling twice a year, consider just taking that one dream vacation that can be an efficient solution. Therefore, one should review the personal budget and stick to basics such as paying off unnecessary debts such as credit card debts and only buy what’s necessary.
In these times across Canada, it’s important to get with family and financial experts about potential solutions available if the size of a mortgage repayment suddenly increases due to higher interest rates. Certainly, there are always available options to explore, such as changing the agreement term of loan action plans whereby you can decrease the monthly or increase it, or renegotiate the terms of the loan with your lender. Whichever solution is adopted, the key component is to understand how much of a repayment fee you can actually afford and ensure you stick to it under all circumstances.