Talk to your lender first
Contacting your existing lender as soon as you know a payment will be missed is often the first and easiest step. Many lenders offer temporary solutions like deferring a payment or adjusting the schedule, especially for a short term situation like a job loss.
Catching up through savings or family help
If the shortfall is manageable, using savings, a short term loan from family, or liquidating other assets to bring the mortgage current avoids the cost and complexity of refinancing entirely.
Refinancing to clear arrears
When the shortfall is larger or savings are not available, refinancing your mortgage to pay off the arrears and roll them into the new loan balance is a common solution, particularly through private or alternative lenders once you are behind.
- Bank refinance if credit still qualifies
- Alternative lender for moderate credit issues
- Private lender for urgent or complex situations
What to avoid doing
Ignoring the situation or avoiding communication with your lender tends to make things worse, since it allows the default to progress further into formal notice territory. Getting professional advice early, whether from a broker or credit counsellor, generally preserves more options.
Frequently asked questions
- How many missed payments before a lender starts formal action?
- It varies by lender, but many begin the formal default process after a payment is 90 days or more overdue, though some act sooner.
- Can I refinance while already in arrears?
- Yes, particularly through private and alternative lenders who specialize in resolving arrears situations as long as sufficient equity exists.
- Will my lender work with me if I am behind on payments?
- Many lenders prefer to find a solution rather than pursue power of sale, so reaching out early and explaining your situation can open up options.