We are in uncharted territory with the mortgage marketplace continually shifting.
Taking care of your financial well-being is at the top of everyone’s list along with health care and feeding our families.
This can be a difficult time for a homeowner as many families are self-isolating or are in quarantine due to the virus. This can result in loss of monthly income and financial instability, which can cause stress and concern about your home and mortgage.
Many homeowners may be looking for guidance around mortgage financing and how the recent COVID-19 developments may impact your mortgage.
Here is a quick summary of some of the potential options available for you:
Mortgage insurers and lenders announced that eligible clients can delay mortgage payments.
These are programs for those who are in a difficult financial situation and unable to make their mortgage payments. You will need to apply to the lender, and assistance will be determined on a case-by-case basis, so please do not start missing payments without a conversation with your lender.
If you urgently need this help, get in touch with the lender immediately. I can help you find the right channels to apply or at least point you in the right direction so please reach out if you are having trouble contacting the lender.
Depending on your lender, there may be options available to you during this time such as:
- Deferral of payments
- Re-amortization of the loan
- Capitalization of outstanding interest and costs
- Special payment arrangements
Please note that when you defer payment for (six) months, in most cases, the lender will take the interest that would have been paid compounded and add it to your monthly mortgage balance.
Upon maturity of your mortgage term, the payments will be calculated moving forward based on the higher mortgage balance.
Here are a few important considerations for homeowners and potential homeowners to keep in mind:
- Mortgage application turnaround times may be an upwards of 15 days in some cases given the current climate and growing developments.
- If you require an appraisal, there can be issues that could delay or prevent access of the appraiser into the home. Lenders are being proactive and exploring policy options to help circumvent this as best they can.
- Don’t forget this situation is new to lenders as well as the rest of us, so they are being cautious yet innovating to overcome any issues.
- Rush transactions will be met with challenges.
Another option that may be available to you is a refinance of your existing mortgage.
This can provide further forms of much needed financial relief by consolidating other debts, extending your amortization to reduce your mortgage payments or gaining access to the equity in your property for a cash reserve for the weeks and months ahead.
I am working hard to stay on top of all information surrounding the development of COVID-19 as well as the responses from Bank of Canada and the ministry of Finance to ensure the most up-to-date and accurate information is available to assist you.
I can help explain the options available to you and provide further understanding as to how this situation may affect your interest rates and mortgage payments.
If you have any questions or concerns please let me know, and I want to wish everyone the best in these difficult times.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.