Getting a bank mortgage was the best move you could make a couple of years ago. Traditional lenders allowed Canadians to own their dream homes through mortgage loans and make affordable payments. But that isn’t the case now: The different economic variables in Canada have forced banks to increase their interest rates, making mortgages expensive.
In fact, Canada’s policy interest rate has risen to 5%, raising mortgage interest rates. This isn’t good news for mortgage holders because it translates to higher monthly payments. With the cost of living also rising, families are left with barely enough to get by monthly.
Getting mortgage loans is even more complicated if you have poor credit, as traditional lenders will dismiss your quest immediately. However, it’s not all doom and gloom. At the end of this piece, we’ll inform you about a reliable bad credit loans lender for affordable mortgage loans whenever a need arises.
Let’s dive into how to safeguard your home despite rising mortgage costs.
But First, How Do Mortgage Rates Rise?
Before learning how to keep paying your mortgage payments, it’s essential to understand how they rise in the first place. Besides your credit rating or mortgage term, the overnight rate set by the Bank of Canada has the most significant effect on your mortgage payments. A higher overnight rate translates to commercial banks borrowing money at a higher rate. These rates then trickle down to you as higher mortgage payments.
How to Safeguard Your Home When Mortgage Loans Overwhelm You
Let’s face it. With the Bank of Canada continuously raising its overnight rate, we probably won’t see cheaper mortgage rates soon from banks. Every Canadian must dig deeper to keep their homes or risk foreclosure, whether you are on a variable or a fixed-rate mortgage loan.
Now more than ever, homeowners must adopt cautious measures to keep making their mortgage payments while keeping up with daily routines. If you’re overwhelmed by mortgage payments, here are several survival tips.
Pay Off Any Debt You Have
Increasing interest rates would make payments an excruciating ordeal if you currently have existing loans. One of the best actions you can take on loans with lower interest rates is to pay them off quickly. Doing so will save you the agony of paying more later. You’ll also relieve the burden of thinking about how to pay multiple loans simultaneously.
Cut Down Some Excesses
A trade-in here, an unnecessary upgrade there, and you’ll slowly get into living beyond your means. With increasing rates, spending more than you make will leave you seeking credit to cope, which significantly means you’ll have less money for mortgage payments. Instead, try living within a budget, cutting back on frivolous spending, and borrowing only what you can afford.
Do What You Can Now: Don’t Panic
In Canada today, it’s easy to upgrade your home and lifestyle now and pay later without caring about anything; you can afford it with planned payments. With rising interest rates, however, you might make higher payments, straining your wallet even more. It’s better to go for what you can now than to start experiencing deferred payment; your wallet will thank you. But again, when in such a situation, do what you can rather than defer payments.
Re-negotiate for Lower Interest Rates
Again, if you’re struggling to make your mortgage payment, the worst thing you can do is keep quiet about it. Contact your mortgage lender and tell them about your situation. Most lenders, especially online lenders like BHM Financial Group, will be willing to renegotiate your terms to lighten the load.
Make Some Income from Your Home
Do you have a spare room you’re not using? How about a spare garage? Great! You can rent it to someone or place a storage space to let. The extra income can go into making mortgage payments, relieving the financial burden. Take some time to think about the best business move you can make with your idle home space, and you’ll be happy you made a wise decision.
Go for Fixed-Rate Mortgages
Unlike adjustable-rate mortgages that can increase your rates anytime, a fixed rate provides stability. With volatile interest rates, a fixed interest rate can help you plan your monthly payments throughout the term. Most lenders have this option, and you only need to make an official inquiry to start enjoying the benefits.
Get a Consolidation Loan
A consolidation loan is handy when you’re stuck with multiple monthly payments, including your mortgage. By having different payments, like credit card debt and car payments, rolled into your mortgage, you’ll pay for a more extended period. More so, it’s possible to reduce your monthly loan payments.
BHM Financial Group for Favorable Mortgage Loans
Getting a home is beautiful, but it can quickly turn disastrous if you go for the wrong mortgage lender. If your credit is unsatisfactory and getting help from traditional lenders is challenging, BHM Financial Group will provide a mortgage option suited to your financial situation.
With us, you don’t have to worry about your interest rate changing. We provide a custom and fixed interest rate that you can seamlessly work into your monthly budget. Here’s why BHM Financial Group is the best for your mortgage needs:
- We provide tailor-made bad credit loans to fit your pocket.
- Our loans are not based on credit scores, making them great for those with bad credit.
- You have up to $50,000 at your disposal, based on the value of your assets.
- Relaxed payment plans that won’t give you a headache paying back.
- Simple, online application process you can fill out anywhere in Canada.
- Our application process has excellent approval rates that guarantee a higher chance of your mortgage application going through.
- There are no restrictions on how to spend the money once it’s disbursed.
- We provide exceptional guidance and support to help you get the right loan.
- Our application process is transparent, with no hidden fees or charges.
Conclusion
Having bad credit is tough enough in this economy, but an increased mortgage rate will make it harder for anyone in such a situation. Luckily, you don’t have to go through this alone. The tips highlighted in this article should help you manage your mortgage terms and repayments.More about BHM Financial Group: Our mortgage experts are ready to help you get a mortgage with affordable repayment plans. Whether a first or a second mortgage, you can trust us to provide outstanding bad credit loans. We also offer consolidation loans that will help you ease those monthly payments. Ready to gain control over your mortgage payments? Apply here.