All About Mortgages During COVID-19
Most times we live our lives only to look back and realize that we lived through a historic moment. This is not one of those times, from the beginning of the Covid-19 virus crisis, every development has been unprecedented.
As a result, many fears have been brought to our doorsteps. With so much information constantly coming, it can be hard to know what to do for yourself, family, friends and finances. Here at Ownest, we would like to take the opportunity to provide some clear insights into what options are available for you and your home.
The first thought you might have is, “I have mortgage insurance, I’m covered,” but there are actually two types of mortgage insurance. The first is a Mortgage Loan Insurance, and you have this if you bought a home with a down payment of less than 20%, and its purpose is to protect your lender in case you can’t make your payments, which doesn’t really help you pay your bills. The second, which you legally must have in Canada, is insurance for the home, protecting it from threats that cause damage; fire, water, accidents, loss of property from theft and liability protection. You can add Mortgage Protection to your insurance to cover your mortgage payments if you become seriously ill or die unexpectedly.
There’s the possibility that you may qualify for Job Loss Protection through one of your creditors. This is a form of insurance that can be added to mortgages, personal loans, and credit cards. It ensures that if you lose your job by no fault of your own, payments are made on your mortgage, loan and credit card balance for a limited time. There are some restrictions, so you should reach out to your creditors and see what you currently qualify for and what you can qualify for moving forward.
Beyond this, many lenders have the option of a pause built into their mortgage terms for emergencies that can disrupt life. But since this is not a regular emergency, lenders and banks of all sizes have announced new measures to support all Canadians facing possible financial hardships. Additionally, the six biggest Canadian banks have publicly committed to, “support (that) will include up to 6 month payment deferral for mortgages, and the opportunity for relief on other credit products.” This means flexible solutions for challenges such as loss of pay, childcare issues or illness from COVID-19.
Keep in mind that there can be some issues with deferring payments in that the mortgage will still build interest, meaning you might have added interest to the original mortgage, but these payments will be pushed to the back end of the principle. Make sure to keep track of your property tax and other lender requirements as they are still on you to keep paying.
Remember that you have other options besides deferring that you can discuss with your lender with some possible solutions including stretching out the mortgage term, adding missed payments back onto the mortgages and lowering the mortgage rate. To know exactly what options are possible, contact your lender. Just realize that there are millions of Canadians who are in a similar predicament, so please be patient as there are only so many people to answer these calls and provide accurate advice for your situation.
Another possible option to ease your financial burden might be to take out a Home Equity Line Of Credit or if possible refinancing your home to take advantage of the recently reduced interest rate. Please feel free to reach out and contact one of our qualified Ownest representatives at email@example.com. It’s important to make sure you’re getting the best possible rates, ensuring relief during these difficult times that won’t over burden you in the future. One of Ownest’s greatest abilities is providing you access to lenders with repayment terms offering more flexibility with the least interest. It can be hard to justify moving credit around, but in these changing times the most important part is to remain in control. So as long as you keep up on the minimum payments you’ll be in great shape to get everything in order once things calm down.
Not all of your options lie with a bank though, the Canadian Government has recently announced some measures that will be helpful to millions of Canadian homeowners. Things have not gotten to the point where freezing mortgage payments are necessary as they are in other countries, but the government does understand that Canadians need help during these trying times. So the government has taken steps for mortgage lenders to be more flexible with customers, moving options to free up banks, and purchasing $50-billion in mortgage debt. Beyond that, there is a $27-billion fund that offers financial support for any Canadian that requires it, even if they don’t qualify for EI benefits. However, like any government program, it takes time for the money to be distributed to where it’s needed. You can find more information on the Canadian Government’s website.
Now more than ever we need to be flexible in how we live our lives and make sure we are staying safe. And with so much in the air, it can be hard to to see a way out of this. Thankfully we live in a country where we know the value of pulling together and even in the hardest times there are resources like Ownest, helping to make sure that we can return to a life we want. If you need any advice or help, please feel free to contact one of our service representatives by emailing us as firstname.lastname@example.org