Kofsky Mortgage

More About Deferred Mortgage Payment Programs

COVID-19 has been a very interesting time for most British Columbians. One of the biggest impacts has come from the economy, unemployment, and homeownership. The government thankfully has come to the table with quite a few different options available to people in different circumstances.

Primarily, on the homeownership side, there have been a lot of questions around the mortgage payment deferral programs available to you. Here are 10 key points to think about :

1. They are discretionary.
Lenders maintain the legal right to timely repayment of their mortgages. Mortgage payment deferral programs are offered at their sole discretion.

2. It is not a forgiveness payment.
A deferred payment program allows you to roll your mortgage payments into your mortgage. You still pay all of the money you owe, with interest. I wish it was free money but it isn’t.

3. You must be able to demonstrate true financial hardship.
Being worried about the future isn’t enough to qualify for deferred mortgage payments. The programs are there for people who are legitimately struggling to make their next mortgage payment. They may have lost their job and/or a large chunk of their income.

If you need to apply, be prepared to submit a detailed breakdown of your personal assets, income, and expenses.

4. If you don’t fall into this distressed category, please don’t call your lender right now.
The reality is, lender phone lines are jammed at the moment. A lot of the calls are from people who are very worried, but not actually in a desperate situation. I know it is scary but please look at your financial situation and if you’ve still got your income and have enough money to make your next payment, delay your call to your lender until it is necessary. Pro Tip: Call whoever helped you set up your mortgage. Your mortgage broker is there to assist you

5. Deferred Payment Programs are typically capped at six months.
Deferring the first payment will be easier than deferring the second one, and the second will be easier than the third, and so on. Right now, six months is about the longest deferral program that you should expect. I have also heard that some lenders are asking for a consistent update on your financial situation and regarding your deferral.

6. Deferring mortgage payments won’t hurt your credit score.
Here is a positive: The lender-approved deferment isn’t counted as a missed payment and it won’t appear on your credit report. Lenders are also typically offering to waive any fees associated with these programs during the crisis.

7. Communication is key.
If you’re about to miss a payment, let your lender know. Seriously, don’t just not tell them. If you just don’t pay your mortgage payment, it may count against you. Remember, the lender does not know your circumstances so please be honest, and have a plan for how you are going to get back on track. If needed, call them at your earliest convenience.

8. Rental property investors may also be eligible.
Property investors with tenants who have stopped making their rent payments will also be considered. Please Note: The BC provincial governments have introduced tenant relief programs and rental-property owners can encourage their tenants who have been adversely impacted by COVID-19 to apply for these programs too.

9. Other options are often available.
In addition to rolling payments into your mortgage for a specified period of time, lenders also have the ability to refinance your mortgage to pay out other debt (subject to qualification), restore your original amortization (which lowers your payment amount), hold a payment (during a temporary suspension of income), or offer you a reduced payment for a specific time.
Please Note: Interest-only payments are not available at this time


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