Coronavirus Mortgage Resources: Mortgage Deferrals & Your Mortgage Questions
Updated: May 4, 2020
We are currently in an unprecedented time, for our society, in Finances and of course for our Family. As your Mortgage and Wealth team, we are here to support you in this time of need. We have some common FAQ's and all the info you need for your Mortgage Deferral and contact below:
Here are some of the most common questions we're receiving answered (will be updated daily):
Can I defer my mortgage payments?
Most lenders have developed a plan to defer your payments up to 6 months. This will, of course, means that the interest will be added to the loan at the remainder of the term. Each lender has a different policy with some being as creative as to set up a second line of credit behind your existing mortgage with %0 interest as an example
Can I refinance to reduce my payments or payout my debts to reduce my cost of living?
Yes, as long as you are still working or can obtain a job letter, we can help you with this. We recommend you book a phone call or contact us as soon as possible to review your personal situation.
Should I lock into a FIXED RATE or stay Variable?
While we always suggest considering your specific circumstance and the uniqueness of your personal goals, we would suggest if you are variable to stay here as it will likely be years before our economy recovers, this means you will benefit from lower interest rates.
Can I get a Mortgage To Help Out if I LOST my Job?
Yes, we have access to lenders and home capital lenders who will provide a mortgage for those who have home equity or who are purchasing a home with at least 20 - 25% downpayment.
Rental Assistance Programs
For renters in some parts of the province, it's possible to get emergency help for rent payments and one-time interest-free loans through rent bank programs.
B.C.’s Ministry of Municipal Affairs and Housing said that “all options are on the table” to support housing stability for renters, including a halt to evictions.
“BC Housing has updated its policies - please CLICK HERE for a full break down."
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Mortgage Deferral Program AKA. What Are Lenders Doing?
We understand that the COVID-19 outbreak is taking a toll on families across the country with many parents being out of work or quarantined. As an industry built on homeowners, many of our major lenders have pulled together to provide you beneficial options during this time and help alleviate some of the financial stress.
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 & costs
Special payment arrangements
What do YOU need to know about Mortage Deferrals?
Deferring your Mortgage Payment is a big consideration and ideally should only be used in a time of true financial need. Before considering deferring your mortgage payment, we recommend reviewing the following options:
Review your Monthly Budget: Are there costs you can remove? TV costs, unnecessary shopping, monthly software or subscriptions?
Consider the long term implications: Deferring your mortgage can lead to marks on your credit bureau which could hurt your future chances of getting a mortgage, additionally you will be adding the mortgage onto the loan which means more money owed and paid in interest in the long term.
Refinance your mortgage, if you are still working you may be able to take advantage of the current market to consolidate your other payments (Car, credit cards, line of credit) into ONE payment which could save you thousands per month.
Still Need to Defer Your Mortgage?
Here is what you need to do:
Contact your lender directly - See the list of phone numbers below
Be aware wait times are VERY high right now
You will be asked to fill out a financial statement to you to confirm that you are eligible - NOT everyone will be accepted.
You will have to pay back the interest PLUS the added interest accumulated. In some cases, you will have the 2nd payment.
Not every program works the same - make sure to contact your lender to confirm the details.
The Big Banks
Big banks including Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC) and National Bank of Canada have opted to provide coordinated relief for their customers.
These banks will be working with personal and small business clients to cope with the economic fallout of the virus. Effective immediately, all six are introducing mortgage payment deferrals of up to (6) months and are also offering relief on other credit products for those families who are facing hardship during this situation.
Mortgage Insurers
In addition to the big banks, mortgage insurers including CMHC, Genworth & Canada Guaranty are working to help homeowners who have been financially impacted by the COVID-19 outbreak. Starting now, they have increased their flexibility and are allowing payment deferral of up to 6 months for home-owners who, primarily but not exclusively, purchased with less than 20% down.
GENWORTH CANADA
Genworth Canada released a statement on March 16, 2020 outlining their Homeowner Assistance Program (HOAP), which is designed to assist Genworth Canada-insured homeowners who experience sudden financial setbacks that could temporarily impact their ability to meet their mortgage obligations. Borrowers who qualify under the lender’s internal guidelines and Genworth’s Homeowner Assistance Program will receive up to six (6) months of relief allowing borrowers some time to recover and focus on what’s important.
CANADIAN MORTGAGE AND HOUSING CORPORATION (CMHC)
Canadian Mortgage and Housing Corporation (CMHC) is offering tools that can assist homeowners who may be experiencing financial difficulty. Their default management tools include: payment deferral, loan re-amortization, capitalization of outstanding interest arrears and other eligible expenses and special payment arrangements.
Read their statement here.
CMHC also provides mortgage professionals with tools and the flexibility to make timely decisions when working with you to find a solution to your unique financial situation, including:
Converting a variable interest rate mortgage to a fixed interest rate mortgage in order to protect you from a sudden interest rate increase, should one occur. Offering a temporary short-term payment deferral. Our team may be prepared to offer greater payment flexibilities, particularly if previous lump-sum prepayments have been made, or if you have previously chosen an accelerated payment schedule. Extending the original repayment period (amortization) in order to lower your monthly mortgage payments. Adding any missed payments (arrears) to the mortgage balance and spreading them over the remaining mortgage repayment period. Offering a special payment arrangement unique to your particular financial situation.
CANADA GUARANTY
In addition to Genworth Canada and CMHC, Canada Guaranty is also doing its part to support homeowners during this difficult time. Per their statement released on March 16, 2020 they noted with their Homeownership Solutions Program, lenders currently have the ability to capitalize up to four (4) monthly mortgage payments.
However, to assist eligible homeowners as they navigate through these challenging circumstances, Canada Guaranty is prepared to extend this program option to allow the capitalization of up to a maximum of six (6) monthly payments. This is assuming the original insured loan amount is not exceeded, request for capitalization is received before September 13, 2020, and that the lender confirms the capitalization is being applied reasonably to help mitigate short-term financial difficulty resulting from COVID-19.
Lender Contact Information
During this time, it is best to discuss your mortgage with us or your lender should you have any financial concerns surrounding the COVID-19 outbreak. Please be advised, there may be longer than normal wait times for calls during this situation and to expect at least 20-30 minutes for a representative. Be sure to have your mortgage number available to ensure smoother service and remember to be kind!
Here is a list of customer service numbers:
ATB 1-800-332-8383
B2B 1 800 263 8349
BMO 1-877-895-3278
Bridgewater 1-866-243-4301
CIBC 1-800-465-2422
CMLS 1-888-995-2657
Optimum 1-866-441-3775
Equitable Bank 1-888-334-3313
Connect First 403-736-4000
Chinook Financial 403-934-3358
First Calgary Financial 403-736-4000
First National 1-888-488-0794
Haventree 1-855-272-0051
Home Trust 1-855-270-3630
HSBC 1-888-310-4722
ICICI 1-888-424-2422
Manulife 1-877-765-2265
MCAP 1-800-265-2624
Merix 1-877-637-4911
Marathon 1-855-503-6060
RBC 1-866-809-5800
RFA 1-877-416-7873
RMG 1-866-809-5800
Scotia 1-800-472-6842
Servus 1-877-378-8728
Street Capital 1-866-683-8090
TD 1-866-222-3456
What does this mean for closings?
All of Canada’s major banks have indicated an intention to remain open. Similar to other businesses, the banks may be working with reduced staff or locations and there may be delays in processing requests.
Tarion Tarion issued an Advisory on Friday confirming that the builder repair period has been suspended until April 13, 2020, and that homeowners may refuse access and builders may refuse to perform after-sales services during the COVID-19 pandemic without penalty.
The Tarion Advisory can be found here.
Client Meetings Due to the focus on self-isolation and preventing further spread of COVID-19, there may be issues with clients not being able to meet with lawyers/notaries – or vice versa. Remote meetings are still a great option during this time (both in real estate and for your mortgage professional - our team) and can be held via phone or video conference with a plan to provide any sworn documents at a later date. If you do meet in-person, don’t shake hands, sit as far apart as possible and be sure to wash your hands after leaving any unfamiliar environments.
Municipalities There have been recommendations that people limit in-person interactions, work from home if possible and not go out for ‘non-essential’ reasons. It is now very possible that municipalities may close their offices or work with reduced staff and that delays in receiving compliance information, permits and municipal agreements may be experienced.
WHAT DOES THIS MEAN FOR YOUR CLOSINGS?
If either the LRO or the banks close, then real estate transactions will not be able to proceed and you would need to seek extensions wherever possible. The good news is that everyone is in the same situation! The bad news is that there is no right in most re-sale agreements to insist on an extension, however, most people are understanding and you will have to rely on their goodness as well as common law principles to extend the transaction.
WHAT CAN YOU DO?
If you find yourself facing financial difficulties as a result of job loss or income reduction during this time, it can be overwhelming and may leave you feeling stressed and unsure of what the next steps are.
To make it easy, we have put together three simple steps you can do to help resolve your financial difficulties and ensure you can focus on more important things such as your family and your health.
Talk to Your Mortgage Professional 👉 THRIVE MORTGAGE CO
Our team is 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 to assist you.
We 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.
To get in touch with our team, you can simply download the My Mortgage Toolbox app to connect remotely or chat with us anytime:
Clarify the Financial Picture In order to benefit from your mortgage professional, you will need to provide detailed financial accounts so they can review your situation and all potential options. Preparing a detailed budget breakdown – including credit cards, loans, and household bills as well as savings accounts and investments – will help us get a better sense of your current financial position and what assistance you may qualify for.
Stay Informed Information is power and the more information you have at your disposal as this situation develops, the better prepared you will be to manage your household and finances. We will be providing updated information right here on our website as this situation develops.
Call or email us if you have any more questions!
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