Gareth Manning, Staff Reporter

THOUSANDS OF homeowners are at risk of losing their houses as banks and other mortgage institutions move to foreclose.

But the banks, building societies and other lending institutions have made it clear that they would rather collect than seize the properties which they would have to place on the auction block at a time when the takers are few.

Cathy Brown, manager of Jamaica National Building Society’s Mortgage Response Strategic Unit, offers tips and options for mortgagers:


1. Exercise discipline now!

Don’t panic! Budget. Buy in bulk. Use up your skills to supplement your disposable income and get the entire family involved in planning the budget.

2. Pay what you have

The mortgage is often the payment many people tend to pay last, given the urgency of other bills such as utilities. To avoid difficulties with monthly payments, however, Brown advises mortgagers to pay what they have. By doing that, you will avoid paying two mortgage payments in the upcoming month.

3. Speak up

Let your mortgage provider know about your situation early on so they can know what option is best for you.

JN OPTIONS

1. Using your upkeep savings

The upkeep is a component of your mortgage payment. The monthly mortgage payment is made up of the principal, interest, the upkeep savings and the escrow (your peril or mortgage life insurance). The upkeep is for improving or repairing the property.

Jamaica National will allow you to use the upkeep to offset part of your principal to make your monthly payments less or allow you to use it to offset your arrears if you find that you are running behind in your monthly payments.

2. Placing a moratorium on your mortgage payment

Your interest payments could be postponed for a period of up to six months. During that period, the principal balance will remain the same. The interest, however, will have to be paid by the mortgager at the end of the period but arrangements can be made up front for the interest of the period to be capitalised and added to the principal balance after the period has expired.

3. Extending your mortgage term

You can extend the period over which you originally planned to pay your mortgage. The period can be extended to allow you to make payments up 75 years of age. This will reduce the monthly payments that you currently make.

4. Debt consolidation

JN has this option available, particularly for mortgagers with debts other than their mortgage, which includes credit-card debts and other loan payments. Once you have a mortgage with JN, the debt can be consolidated. This is, however, done on a case-by-case basis.

5. Freezing your interest rate

If there is an increase in your interest rate, JN can freeze the interest for a period of time to allow the mortgager to make the same monthly payments.