Today’s world is an ever-changing landscape of inflation and interest rate changes.
That said, communicating with your lender can be one of the best things your borrower can do.
You may have heard the advice at some point or another that “silence is golden.” And honestly, there may be times where this is good advice. But when it comes to communicating with your private lender or MIC, this could not be further from the truth.
As market changes inflict their pain on today’s borrowers, many will reach out to their brokers for guidance. If you have a borrower working with an alternative lender or MIC, encourage them to reach out as soon as possible. As lenders, we are equipped with the experience and knowledge to offer options and solutions during difficult times.
Your lender is equipped to offer a multitude of solutions depending on the borrower’s circumstances. All you need to do is simply communicate with your lender:
- If there’s enough equity, can the borrower capitalize a few of their payments?
- Is it possible for the mortgage be re-amortized to reduce the payments?
- Does the borrower qualify for a ‘no-payment’ mortgage (call the experts at Kokanee to learn more about no-payment mortgages).
- If the borrower is older, can they be moved into a reverse mortgage?
- Maybe the best course of action is an arrangement for the borrower to sell the property that they can no longer afford and avoid the stigma of foreclosure.
It’s also important to make your borrower aware that if payments are missed without communication, the lender will typically assume the worst and commence collections. But if the borrower can inform the lender in advance, they may find they’re amenable to the situation. They will likely also find that they’re even very helpful in finding a solution. Early communication is key not only in finding a solution but also in preventing issues before they have a chance to arise.