Smart Strategies to Stay Financially Secure
September 21, 2023 | Posted by: Keith Leighton
Smart Strategies to Stay Financially Secure
If you have a mortgage, it's essential to prepare for the possibility of reduced income, job loss, or unexpected expenses during tough times that can pose significant challenges to homeowners. A prudent step is to protect your financial stability and minimize the potential negative impacts of your financial well-being. Here are some strategies to help you prepare for a financial downturn while managing your mortgage responsibly.
1. Build an Emergency Fund: Start or beef up your emergency fund to cover at least 3 to 6 months' worth of living expenses. This financial cushion will be your first line of defense during uncertain times, enabling you to cover essential expenses, including your mortgage payments.
2. Reduce Debt: Pay down high-interest debts such as credit card balances and personal loans. Reducing your debt load can free up more of your income and reduce financial stress.
3. Review Your Mortgage Terms: To help you make informed decisions when adapting to changing financial circumstances determine: is your interest rate fixed or adjustable, how many years are left, is the monthly payment amount affordable in a financial downturn, and are there prepayment penalties or fees for early repayment.
4. Contact Your Lender: If you foresee difficulties making your payments, proactively contact your lender to discuss your options. They may offer temporary relief measures, such as loan modification, forbearance, or payment deferral.
5. Consider Refinancing: Consult with your mortgage broker to determine if you can reduce your monthly payments by consolidating and make your mortgage more manageable during a downturn. However, be aware of associated costs and potential long-term implications.
6. Prioritize Mortgage Payments: Make your mortgage payments above other financial obligations to protect your home. Keeping your home is often a top priority, as it provides shelter and may increase in value over time.
7. Cut Non-Essential Expenses: This extra cash can be redirected toward your mortgage payments or added to your emergency fund. Reducing discretionary spending can help you stay current on your mortgage and maintain financial stability.
8. Consider Selling or Downsizing: You may need a more affordable property. While this can be a difficult decision, it's essential to prioritize your long-term financial health.
9. Seek Assistance: If you're facing financial difficulties, don't hesitate to seek help from government assistance programs, non-profit organizations, or financial counselors. Canada has various support systems in place for those in need.
10. Stay Calm: Panicking during financial uncertainty can lead to impulsive decisions that may not be in your best interest. Stay focused and rational in your financial planning.
Preparing for a financial downturn while managing your mortgage requires careful planning and proactive steps. Remember that communication with your lender is key, and seeking professional advice with a DLC Ideal Mortgage expert can help you make informed decisions to secure your home and financial future during challenging times. By taking these steps, you can be better prepared to navigate the uncertainties of a financial downturn while safeguarding your most significant investment—your home.
Call us today at 902-453-2307 or email us at info@GetTheIdealMortgage.com
