Mortgage Deferral

Krista Lindstrom | April 24, 2020

10 Things You Should Know

1. Mortgage Payment Deferral IS NOT Payment

Forgiveness – Your Loan Obligation Remains Payment Deferral is not payment amnesty. You are still required to pay your mortgage in full. During the Deferral process you will gain assistance from your lender to manage payments. This can include holding a payment and reduced payments during hardship. The payments you miss or alter will be rolled back into your mortgage and will be subject to interest.

2. Mortgage Relief Options Differ by Lender

Each lender has their own policy surrounding Mortgage DeferralPayment options. Not all lenders offer mortgage payment relief. If you are unsure of what your original mortgage commitment outlines please contact your mortgage broker to discuss. We can offer assistance and explore options with you.

3. There’s a Time Limit

These programs are not debt-forgiveness as noted (see 1). They are solutions to defer (put off) payments for a time. For many lenders this is a month-to-month process with a cap at six months. Borrowers are still responsible for meeting their obligations when they can.

4. Financial Distress Must be Demonstrated

These programs are provided on a case by case basis; they are for borrowers in crisis mode (ie when the possibility of a missed mortgage payment(s) is/are imminent). Be prepared to submit a detailed breakdown of your personal assets, current income, and expenses at the time of application.

5. Not in Distress? Have Questions?

Lender phone lines are being flooded with inquires. Lenders are asking that only those in immediate need contact them at this time. Your mortgage professional that originally worked with you in obtaining your mortgage is a great place to start. If you don’t have one, we are here to help.

6. Keep an Eye on Your Credit.

A lender approved deferment is not a missed payment and should not appear on your credit bureau/report as such. Watch your credit to ensure accurate reporting. Many lenders are offering to waive any fees associated with these types of programs during the COVID-19 crisis.

7. Communicate. Communicate. Communicate.

If you are going to miss your mortgage payment, contact your broker or lender before the missed payment.

8. Your Other Obligations Remain

Property tax instalments, utilities and insurance premiums are separate from these programs. Payments must continue. Municipalities/insurance companies should be contacted independently; many are currently implementing relief options as well.

9. Landlords Have Options

Property investors (landlords) with tenants who have stopped making their rent payments will also be considered for deferral programs. The same rigorous assessment standards (see 4) will apply.

Note: some provincial governments have introduced tenant relief programs. Rental property owners can encourage their tenants who have been adversely impacted by COVID-19 to apply for these programs where available.

10. A Mortgage Broker Can Help!

We recommend you contact your mortgage professional to review all your options. Need a connection? We are happy to introduce you to one of our experienced brokers.

 

 

Filed under: Covid-19, Mortgage

Tags: covid-19, deferral, financial distress, mortgage, mortgage relief