Strategies to keep your mortgage payments up to date and your credit strong amid COVID-19 life.
Local mortgage broker Michael Huber shares his advice on how to navigate these uncertain times financially.
“I’m working at home today, in self isolation in Peachland, BC, and fielding more than a few calls from concerned clients.
I’ve been brokering mortgages since 2014 in the Okanagan and before that, worked in the Health Minister’s office at the Saskatchewan Provincial Legislature. Over this time, many crises have come and gone. But I’ve never seen this kind of situation before.
People are rightfully worried about recent or impending job losses, reduction to their working hours and how our nation’s mortgage lenders will respond to inevitable COVID-19 payment disruptions.
Included in this article are options you have at your disposal to navigate the current situation.
1) Talk to your mortgage broker or mortgage lender about existing skip or payment deferral mortgage clauses.
Lenders have clauses in your mortgage contract right now that allow you to skip a payment or defer a payment due to certain circumstances.
Keeping in communication with your lender is key during this time if your payments may be disrupted. Lenders will work with you to defer or skip payments and ensure that these payment alterations don’t register on your credit bureau as missed mortgage payments.
2) Lender updates – as of March 19, 2020
COVID-19 relief announcements have come from mortgage companies and the Big 6 banks. Respected Canadian mortgage lender First National Financial LP had this to say, “Our financial relief program will be customized to each individual’s circumstances and could include deferral of payments on mortgages for up to six months.”
These announcements correspond with social media updates from the nation’s mortgage insurance companies; CMHC, Genworth and Canada Guaranty. CMHC tweeted that it “will support lenders in allowing deferral of mortgage payments for up to six months for those impacted [by the coronavirus].”
It sounds likely that the 6-month deferral is going to happen since both the nation’s lenders and mortgage insurers are tweeting about it. However, the deferred mortgage payments plan (so far) relates to insured mortgages through CMHC/Genworth/Canada Guaranty. News articles have been clear that most payment deferral requests will be made on a case by case basis.
More details on the 6-month payment deferral program will be available over the coming days.
3) Federal Government Relief
The Federal Government announced a relief package today to help Canadians and Canadian businesses weather the COVID-19 storm.
Here are some details from CBC News.
$2 billion boost to Child Care Benefit
$900 biweekly for Emergency Care benefit up to 15 weeks
$5 billion Emergency Support Benefit for unemployed without EI benefits
6-month interest free moratorium on Canada student loan payments
10% wage subsidy for small business
Deferred tax payments until after August 31, 2020
Applications for Federal Government relief benefits can be made in April through the Canada Revenue Agency website.
Be well. Thank you very much for reading. Please share.” 🙂
For regular updates on this situation and above mentioned information make sure to check out Michael’s blog at HuberMortgage.com.
If you have any mortgage related questions you can contact Michael Huber here.
If you’d like some tips on how to save money when you buy your next house, please check out his free Huber Mortgage Home Buyers Guide.