How to Manage Your Mortgage During a Crisis
The year 2020 has been off to an interesting start- the world as we know it has completely changed with the Covid-19 virus and the lockdown procedures placed in effect.
Many businesses and schools have had to close, leaving many families wondering how it’s going to affect them personally, with the biggest concern often being “how will I be able to pay my bills?” , or, “Am I able to defer my mortgage payments?” In times like these it’s important to act quickly and efficiently.
Stay Positive During Tough Times
The most important thing to do during any type of crisis is to stay informed and get your information straight from the source. One good thing that has come from this crisis, is knowing that you have options with your mortgage payments, as the top 6 Canadian banks have offered a 6-month mortgage payment deferral available for those in need of assistance. Neil Parmenter (The president of the Canadian Bankers Association) tweeted on Wednesday that these measures will be effective immediately:
What would be the First Step?
It’s recommended to contact your bank sooner rather than later before you find yourself in any kind of financial trouble, but make sure you are prepared with a list of questions to ask.
Which option will Work Best for Me: Holding or Skipping a Payment?
If you choose to defer any payments, be aware of the fact that the interest accrued during the skipped periods will be added to your principal balance, which will impact how much interest you pay in the long term. It’s also good to note that the hold/skip options will not hurt your credit score.
*Is it possible to extend my mortgage amortization in a way that could benefit me long term by lowering my current monthly payments?
*If we choose to skip a payment, is it possible to spread that missed payment over the remainder of my mortgage?
*Would there be any individualized payment agreement that could be worked out based on my family’s specific needs?
* is it possible to convert a variable interest rate mortgage to a fixed interest rate mortgage to protect yourself from any unexpected interest increases?
Make sure to contact your lender for more Information
Currently, all banks remain open but given the quickly evolving situation, that could change at a moment’s notice. Below is a list of all the banks and their phone numbers to contact with your questions:
We have our both our Federal and Provincial Governments Help
Both our federal and provincial governments are offering significant financial help during these trying times, so if you have experienced a temporary lay off or need to stay home with your kids, there will be financial support available for you as well.
The most important thing to worry about right now is the health and safety of you and your family. Practice proper hand-washing and minimize your contact with other people to ensure that you are not unknowingly contracting or spreading to others the COVID-19.
Together we can and will overcome this!