A new survey from the Lawyers’ Professional Indemnity Company (LAWPRO) found that most Canadians do not know what options they have when it comes to difficulties with mortgage payments. Of the 1,500 Canadians surveyed, 61 per cent do not know where to turn if they can’t pay their mortgage.
In the 18 to 34 age group, 74 per cent did not understand their options in the event of inability to make a payment. Canadians in this age group were more likely to be first-time homeowners in the early stages of making mortgage payments.
Overall, the survey found that while Canadians see homeownership as a valuable asset, many of them lack the financial and mortgage literacy to protect their investment.
“Arming yourself with knowledge is key,” says Ray Leclair, vice-president of public affairs at LAWPRO. “If you’re experiencing financial difficulties, you don’t have to go to your lender alone and unprepared. Speaking with a lawyer is an investment in learning your rights and obligations regarding a mortgage you can’t pay.”
Potential options include:
- Restructuring mortgage payments
- Refinancing with lenders
- Working out an agreement for future payments;
- Reviewing revenue possibilities from the property;
- Selling on the seller’s own terms; and
- Seeking financial assistance from friends or family.
“If you’re behind on your mortgage payments, other priority payments associated with the property, such as taxes, condominium fees and utility bills may also be affected,” Leclair says. “It’s wise to engage in a dialogue with your lawyer and lender sooner rather than later if you are behind, or anticipate running behind on payments.”
