Most people only think to call their mortgage broker when they need a mortgage.

Which makes sense. By all means, call your Ottawa mortgage broker when you need a mortgage!

But there are many other reasons and circumstances when you should pick up the phone or send an email to you mortgage broker.

Mortgage payment difficulties

• If you’ve ever lost a job you understand the emotional toll it can take. One of the most stressful aspects can be the uncertainty of knowing when the next paycheque will come in. Especially if your job search stretches longer than you anticipated.

• Significant medical issues can also be a time of significant financial stress. There can be any number of added expenses plus a significant loss of income depending on your employment situation and the amount of time you might miss. I’ve seen it many times; debt can pile up quickly when medical issues strike.

• If you’re self-employed, you know that there are peaks and valleys when you’re an entrepreneur. Sometimes your cash flow gets tight, and meeting your financial obligations becomes a challenge.

Call your Ottawa mortgage broker

The two main things to keep in mind when faced with financial challenges:

• Don’t miss a credit card payment. This can have a hugely negative impact on your credit rating. More so than missing most other bills.

• Don’t wait until you get to the point where you risk missing a mortgage payment.

Call your mortgage broker at the first sign of trouble.

The sooner, the better.

Your broker can assist in negotiating with your lender and insurer to reduce your payments so you just have to cover the interest, or reduce your payments by spreading out the amortization period.

Mortgage prepayment options

Maybe you received an inheritance, a gift, or a big bonus, your business had a great year, or you’ve just come to the end of the year and you’ve got a significant sum in your savings account.

So why not make an extra payment on your mortgage, right?

Before you do that, though, have a conversation with your mortgage broker. First, we need to make sure the terms in your mortgage won’t adversely penalize you for a prepayment (as I always say, the devil’s in the details).

And we need to make sure a prepayment is REALLY the most effective use of your funds. For example, it may make more sense to maximize your contribution to your RRSP and use the tax savings to then make a prepayment towards your mortgage.

Changing mortgage payments and amortization

As we discussed above, you’ll want to contact your mortgage broker to change your mortgage payments and amortization when you experience financial difficulty.

There may also come a time when an increase in income will allow you to increase your payments, and thus shorten your amortization. This can easily be done at renewal time, but if you’re one year in on a five-year mortgage, you might not want to wait.

But don’t rely on advice from your lender. Get in touch with someone who has your interest at heart, not the bank’s bottom line. Get in touch with your Ottawa mortgage broker. Call me, Jacquie Bushell.