Income loss can prove a significant problem for mortgage payment
With prospects for the US economy seemingly darkening and speculation growing of a possible downturn in Canada’s economic outlook, a prominent mortgage and real estate expert has offered advice to Canadians on safeguarding their homes and credit scores from the potential impact of income or job losses.
Victor Tran, speaking for RATESDOTCA, urged Canadians to plan ahead for the possibility of an unwelcome development on that front.
“In the unfortunate event that a homeowner loses a job or other source of income, it’s important to remember that missed mortgage payments can have negative effects on future credit,” he said. “Being prepared to weather a financial hit such as a job loss is a good idea.”
Tran’s topmost advice to Canadian homeowners is to secure additional financing while still employed.
“Lines of credit, home equity lines of credit, and similar financing vehicles can provide a much-needed buffer in the event of a job loss or difficult turn in finances. As they are challenging to secure without employment, setting them up while employed is essential,” he said.
He also advised homeowners to always consult with their lenders for possible alternative plans for mortgage payments.
“In the event of tight finances or income loss, reaching out to your mortgage lender may help in developing a payment plan to get you through a tight spot. There may be options for delayed payments or deferrals,” he explained.
Moreover, Tran also advised homeowners to pay down a portion of a mortgage as a countermeasure in case of income loss or financial difficulty.
“If it’s a financial option, prepaying a portion of your mortgage can help lower monthly payments in anticipation of a tighter budget,” he said.
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