I may miss my mortgage payment. What should I do first?

The client problem

Clients often protect credit cards first because those collectors call sooner. The mortgage is secured by the home, so ignoring it creates the larger risk.

A practical Ontario example

A temporary income interruption will last eight weeks. An agreed payment arrangement may be less damaging than an unapproved missed payment. If the problem is permanent, a refinance, sale or structured alternative loan needs to start early.

How the lending routes may differ

• A lender: ask the existing lender about its hardship or payment-relief process; approval is case-specific.
• Alternative/B: may refinance arrears when income, equity and property fit, with lender and broker costs included.
• MIC/private: may stop an immediate default through short-term equity financing, but only with a realistic sale, refinance or other exit.

Policy boundary: FCAC expectations discussed here apply to federally regulated financial institutions and do not require every lender to offer the same relief.

Questions to ask now

• Is the problem temporary or ongoing?
• How many payments are at risk?
• What is the current property value and mortgage payout?
• Can the household afford the mortgage after any rescue loan?

Rajiv’s practical view

Protect the home by dealing with the cause early. A new mortgage should create time for a workable recovery, not add cost to a payment that remains unaffordable.