Does my lender offer mortgage payment assistance?

With the Canadian government’s directive, banks and financial institutions are offering assistance to loans and mortgages in light of the economic struggles brought about by COVID-19. The official website states that homeowners can request for deferral of mortgage payments for up to six months from their lenders.

Are there government relief initiatives offered to Canadians for their mortgage payments?

At the beginning of the pandemic, the Federal Government had pledged support to its citizens who’ll feel the economic impact through their mortgages. For starters, they have relaxed the process to work with your mortgage lenders. Also, provisional income-generating schemes such as the Canada Emergency Relief Benefit (CERB) have been put into place.

Can I still get a mortgage during the pandemic?

Yes, you can. Most financial institutions are offering different loan arrangements with different structures in order to suit your unique circumstances. But just like in any situation, you must make sure that you are eligible and comply with all the necessary requirements to be approved. You can contact your mortgage broker to learn more.

What does mortgage deferral mean and how does it work?

In the Government’s continuous efforts to alleviate some of the financial pressure, a mortgage deferral plan has been implemented. With this temporary emergency measure, homeowners are allowed to postpone or skip a payment schedule (both on the principal and interest) for a period of one to six months. You can contact your lender about their specific process and eligibility requirements to learn more.

Who is qualified for a loan or mortgage deferral?

If you are struggling financially and economically due to COVID-19, you are encouraged to apply for a mortgage payment deferral.

Each applicant is assessed on a case-to-case basis. Various factors that caused a change in a homeowner’s current financial situation that impacts his or her capacity to make mortgage payments are heavily considered.

Will my credit score be affected by my request to defer mortgage payment?

Award-winning mortgage broker and best-selling author Peter Kinch says that he doesn’t foresee a situation wherein credit scores will be impacted by mortgage deferral requests. As long as you have always been in good standing and request in good faith, you have nothing to fear.

Is there an offering for a longer-term mortgage relief beyond the two-month period?

Most lenders are willing to extend mortgage payment deferrals for up to six months. However, they’re also cautioning borrowers in making this decision because, as mentioned earlier, interest will continue to accumulate.

You may want to consider these before applying for a mortgage deferral:

  • How is your current spending? If you’re able to distinguish between the necessary and the frivolous, then you may not require a mortgage deferral.
  • What other debts do you still have? If skipping payments don’t provide any type of debt relief, then it may be better to rethink your decision.
  • What does your cash flow look like? Are you liquid enough to pay off other smaller, high interest debts? 

After careful analysis, you can then determine if there’s really a need to request a mortgage deferral.

What will the housing market look like after the COVID-19 Pandemic?

It’s fair to assume after reading the headlines and observing global market trends that the housing market is struggling. However, this is actually an opportune time for both home buyers and sellers.

On the buyers side, you can enjoy lower interest rates that’re being offered by many lenders on mortgages. Also, technology has made it so much easier to see a house virtually and coordinate with a broker in order to facilitate the purchase of your dream home.

From the sellers perspective, there’re many potential buyers who’re savvier now and more eager to purchase a home. Couples who originally saved up to get married are now foregoing that and are planning to buy a house instead.

Frequently Asked Questions: COVID-19 and Mortgages, Mortgage Broker in Greater Toronto Area

Daisy Raouph, CLU, CHS, specializes in mortgage financing solutions and financial services. A Mortgage Broker and Financial Security Advisor with over 30 years of experience in financial services. Contact us today to review your mortgage financing options. We can help!