Given recent news that nearly 1 million Canadians would be unable to keep up with their monthly payments if interest rates increased by only 1%, Freida Richer, Licensed Insolvency Trustee with Grant Thornton’s consumer insolvency team in Edmonton, warns that consumers who are unable to continue their mortgage payments may be facing a housing foreclosure.
She’s worked with consumers in a variety of financial situations and offered her advice for consumers in this situation:
- Approach the situation earlier rather than later: A housing foreclosure can be more damaging to a consumer than filling bankruptcy. While facing financial worries can be daunting, approaching these situations earlier rather than later allows more time to find a solution that works for both the lender and the borrower.
- Work with the bank: Banks don’t want to see a house sitting empty, if you work with your bank you may be able to live in the property until it is sold, granting you much more time to find alternative options.
- Know your equity: More equity in a home often means a longer redemption period for a homeowner. Having more equity in a home could mean the difference between one day and six months in that home.
- Resolving your exposure when foreclosure occurs: A mortgage deficiency judgment obtained against you as a result of the foreclosure is treated as an unsecured claim which can be resolved through a Consumer Proposal or Bankruptcy.
To learn more from Freida, visit www.gt.alger.ca