Surviving Canada's Housing Crisis: Expert Tips & Tricks

How do you survive the current housing crisis when interest rates continue to rise? In this blog post we'll tackle that pressing issue.

For many homeowners, trying to survive the current stress-filled housing crisis is similar to trying to keep your head above the water during a flood. If you're among those hit hard by rising interest rates, take a deep breath because there are steps you can take to alleviate some of your anxiety.

The first step? Review your financial situation and create a revised budget that takes into account your recently increased mortgage payments. That may be a piece of paper where you jot down a list of all income coming into your household, then a second column with all of the fixed expenses (mortgage, property taxes, utilities, car loan, etc) you pay each month.

You'll also need to create a third column for your list of debts - any credit cards or lines of credit or bank loans you have right now. Make sure you add your mortgage to this list. Once everything is listed, you'll have a simple yet effective overview of your financial situation.

Making this kind of list is essential to ensuring you’ll have the funds you need to pay all of your bills and your mortgage each month. That may mean cutting back on some non-essential expenses (restaurant meals, those Tim Horton coffee purchases or movie tickets). By listing all of your expenses you will then be able to visualize areas where you might be able to reduce your spending.

Finding additional income sources (such as driving your vehicle for Uber or hosting a garage sale) can also help short-term to bring in some additional money. Every little bit helps right now.

Dealing with declining property values

The real estate market can be unpredictable and declining property values can be disheartening. Always remember: Real estate is a long-term game. If there is no urgency for you to move anytime soon then sit tight and keep making those mortgage payments each month. Market conditions are likely to improve for real estate over time - markets are cyclical and oldtimers like myself have seen a few of these situations in Canada before.

Also, if you're facing a scenario where your mortgage remains high while your property value begins to drop, don't be afraid to talk to your bank about your options. But don't let them pressure you into increasing your payments or extending your amortization time if you can avoid it.

Your mortgage is a contract with your bank or broker - as long as you're making your payments on time each month you should be fine for the short-term. Reach out and discuss your situation with your bank manager and see what you can negotiate to ease your situation a bit.

It's been reported that many banks have tightened their lending policies. But no one wants you to lose your home. By talking to several reputable mortgage brokers as well as your bank you may find alternative solutions to help you through this difficult time.

Most important: Don’t sign any documents without a reputable real estate lawyer reviewing them first.

Diversifying your Investments

While the housing market faces challenges, diversifying your investments can offer added security. Once again, get advice before you move ahead - I recommend speaking with a licensed financial advisor to explore opportunities that align with your long-term financial goals and risk tolerance. Do not take your financial guidance from Tik Tok or Facebook and do not rush into signing anything out of fear. The bottom line? Navigating the current housing crisis with its rising interest rates is survivable and doable. Tweak your household budget, stay calm in the face of property value fluctuations, and work with your mortgage lender as needed. And consider diversifying your current Investments for added financial stability.

Remember: With the right tools and attitude you can survive the current financial environment and secure a successful financial future.