Please take a moment to read this important information regarding your mortgage.
First, I wish you and your family good health in these trying times. Hopefully this situation stabilizes soon.
You’ve likely seen news stories yesterday about lenders deferring mortgage payments for up to six months.
This is true however there are a few things to keep in mind:
✅ Please note this is not a payment holiday❗️
Deferred payments will be added to the outstanding mortgage balance.
✅ This is designed to help those in Financial need only (Perhaps you just lost your job…)❗️
I can’t stress this point enough. If you call your lender they are going to make a case-by-case decision on your current financial situation, not on potential difficulties. If you are still working it’s unlikely they will defer payments.
✅ Only contact the banks if you ARE in FINANCIAL DIFFICULTY❗️
As you can imagine lenders are swamped with phone calls and the situation is exacerbated by the fact their employees are working from home.
✅ Keep the phone lines open for those that need it❗️
You are likely to be on hold for several hours when you call. I can’t stress enough that if you’re not currently in financial difficulty with a job loss, you should not call your lender.
Insurers (CMHC, Genworth, and Canada Guaranty) already had programs in place with the lenders that allowed them to capitalize up to 4 monthly payments. They will extend the program to allow up to 6 months of capitalization provided that:
1. Original insured loan amount is not exceeded
2. Request to cap payments is received prior to Sept 3, 2020
3. Bank/lender confirms the capitalization is being applied reasonably to help mitigate short-term financial difficulty resulting from COVID-19.
The insurers have several other default management tools available which include: payment deferral, loan re-amortization, and other special payment arrangements. All assistance options will be considered on a case by case basis.
The programs are facilitated through the banks/lenders and therefore you should contact your lender directly for further assistance.
Some banks/lenders have their own assistance options as well.
You need to keep in mind that lenders may require you to do a mortgage application and may check your credit as part of that process. They may end up charging fees for deferring payments and they will certainly charge interest on the increased loan amount.
Here is a list of customer service numbers:
B2B 1 800 263 8349
First National 1-866-557-5509
Home Trust 1-855-270-3630
National Bank 1-888-835-6281
Street Capital 1-866-683-8090
Many people believe interest rates are falling because the Bank of Canada lowered its key rate twice in the last couple of weeks. I suspect the Bank of Canada will decrease its rate again soon.
It is true that if you currently have a variable rate mortgage your rate and payment will decrease.
However, lenders are increasing rates (by decreasing the discount from prime) on new variable rate mortgages.
Fixed rate mortgage rates have been increasing in the last week as well because lenders are pricing in increasing levels of risk.
Rates are still extremely low so there is a possibility you may be able to get a lower rate than you currently have. I can do the math to see if it makes sense for you to break your current mortgage.
✅ As always I am here to help. If you are in a position to refinance your mortgage to extend your amortization and reduce you monthly payments or to consolidate unsecured debt like credit cards and lines of credit, please call me at 780.720.2490.
Feel free to pass this email on to family or friends who have concerns about their mortgage or need help with payment deferral.
All the best
TMG The Mortgage Group
10250 176 Street