The mortgage deferral plan isn't a government grant, but a lender decision. Homeowners and landlords are struggling and need help.
VANCOUVER, B.C. (PRWEB) March 24, 2020
Despite the hope offered by the deferral relief announcements, homeowners and landlords are now realizing that the mortgage deferral plan isn’t a government grant, but a lender decision.
That means not all property owners struggling to make a mortgage payment (or pay bills) will be approved for a mortgage deferral. It also means landlords may not be capable of passing on rent relief to their tenants.
To qualify for the relief, borrowers need to show evidence of unemployment, diminished assets, lack of savings and other financial hardships that would make it difficult or impossible to make a near-term mortgage payment.
That means many property owners and small landlords will be scrambling to make their April 2020 mortgage payments. But there are options. Here are 8 tips to help:
#1: Use your mortgage 'skip-a-payment' option
#2: Know that the 'skip-a-payment' option does not hurt your credit score (but missing a payment or making a late payment can).
#3: Don’t liquidate your RRSPs to pay your mortgage (or other debts)
#4: Ignore bad financial advice (such as taking out a loan, at this point in time, in order to invest)
#5: Use your credit options (such as HELOCs and low-interest credit cards)
#6: Apply now for a low-interest loan (just don’t expect to get approved quickly, or if you’re debt ratios are high)
#7: If you’re a landlord, know that banks and mortgage lenders won’t let you defer a mortgage unless it’s on your principal residence.
#8: Be proactive (call your lender to discuss increasing your amortization, applying credit from past pre-payments, deferring payments or other lender-specific solutions).
While every financial situation is different, the key to tackling the COVID-19 outbreak impact on your monthly budget and mortgage debt is to get educated and be proactive. Remember to keep paying your bills on time, even if it's only making the minimum payment. Missing or late payments will be reported on your credit report, which could lower your credit score and make it harder for you to obtain credit now and in the future.
To learn more about these tips, go online.
Zolo is one of Canada's most popular online national real estate marketplaces. Each month, more than 9 million buyers and sellers start their real estate search using Zolo. As a tech-disruptor national brokerage, Zolo provides users the data and resources needed to make better-informed property decisions.
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Romana King, Director of Content & award-winning personal finance columnist