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What you can do about mortgage payments during the COVID-19 outbreak!
What you can do about mortgage payments during the COVID-19 outbreak! WE ARE HERE FOR YOU! The continued spread of COVID-19 has understandably raised concerns for you and your families. You may have questions about the financial market and/or your mortgage. Please know that we are available to help guide you and your family through these turbulent times. We at Capital Home Lending understand this is an uncertain time for everyone and we are here to continue to support you, whatever your needs may be. Many people have been asking about the COVID-19 Deferred Mortgage Payment Program. During these challenging and uncertain times, many lenders have programs in place to address payment difficulties caused by the current COVID-19 pandemic. This includes a deferral of mortgage payments for up to six months. Keeping you informed. Here is what you need to know: This is not a loan/debt forgiveness program Many banks and mortgage lenders, in partnership with our mortgage insurers, have announced they will work to support and assist individuals whose income has been impacted by the COVID-10 outbreak. This is tremendously comforting to those individuals who will find themselves in financial hardship as a result of income reduction or cessation due to quarantine or business challenges. These supports are provided by the lenders who offer them on a case-by-case basis, and individual borrowers circumstances will determine their respective eligibility. Industry members are reporting that some Canadians have incorrectly interpreted media reporting of these programs as providing a payment amnesty or loan forgiveness, regardless of your current financial circumstances. Lenders are becoming inundated with calls from borrowers asking for assistance who have not been directly financially impacted by the crisis Lenders maintain the legal right to timely repayment of their mortgages. Mortgage payment deferral programs are offered at their sole discretion. No lender is going to forgive your mortgage payment. A deferred payment program allows you to roll a defined number of mortgage payments into your mortgage. You still pay all of the money you owe, with interest. Borrowers are still responsible to meet their obligations where they can. You must be able to demonstrate true financial hardship. These programs are for people who are genuinely struggling to make their next mortgage payment. Those who have lost their job and/or most of their income, and dont have reserves to draw on. If youre not in this group, you arent likely to be eligible. Be prepared to submit a detailed breakdown of your personal assets, income and expenses. Note: If you dont fall into this distressed category, please dont call your lender right now. Frequently Asked Questions: What does payment deferral mean? And why isnt it interest free? A payment deferral means your lender will allow you to have a break from your regularly scheduled principal and interest payments for an agreed-upon period of time. The interest on your mortgage loan continues to accrue but it is added to your outstanding mortgage principal instead of becoming due on your usual payment dates. Note that payment deferrals could extend the amortization period of your loan. However, once you are able to re-start a regular payment schedule, lenders can help you get your amortization back to where you want it to be by using one of your flexible pre-payment options. There is no interest free deferrals. Note: Any deferral granted will not apply to tax and insurance payments, which must continue to be paid by you. I own a rental property, the tenant cant pay the rent because they have been laid off, what can I do? Please contact your lender to discuss your situation and options. The last thing any lender wants is your mortgage going into a delinquency status. If you are having financial hardships, this will be assessed on a case by base situation. Note: Some provincial governments have introduced tenant relief programs. Rental-property owners can also encourage their tenants who have been adversely impacted by COVID-19 to apply for these programs if available. Is there a fee to hold or defer my payment? Most lenders are waiving / refunding the non-sufficient funds (NSF) fee for missed or stopped payments If I defer a payment(s), will this impact my credit rating? A lender-approved deferment isnt counted as a missed payment. Deferring your loan payment doesnt have a direct impact on your credit score. Your loan may continue to accrue interest, and you might pay more in the long run, once you resume making payments. I am having trouble getting through to my lender, what can I do? Communication is key. Lenders are experiencing an unprecedented volume of requests. If youre about to miss a payment, call first. Wait times may be longer, however, specific lender hotlines have been facilitated to accommodate the current volumes. If you are about to miss a payment and cant get through on the phone lines, send your lender an email. Lenders will often waive NSF fees if you miss a payment but can demonstrate that you tried to notify them in advance. If your payment is not due within the next 7 days, try to email first. If you can, contact the person/broker/agency that arranged your mortgage in the first place. They can help answer any questions you have or navigate you through any requests. 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. You can also choose to borrow from your home equity line of credit (HELOC), which is a revolving credit line that essentially uses your home as collateral. It provides flexibility when borrowing and repaying. Of course, youll still have to eventually repay your HELOC and keep up with minimum payments, but its a decent temporary solution if you already have a HELOC set up. These are difficult times, and lenders are working around the clock to respond to customer inquiries and help the borrowers who are adversely impacted by COVID- If its taking a long time for you to make contact, please do keep that in mind, when you do finally get a live person on the other end of the phone. We are here for you! Keep well stay safe! Sources: Mortgage Professionals Canada, First National, Verico Communications
Big jump in home prices in March
The Teranet-National Bank HPI jumped 1.5% to a new high in March, its 17th straight monthly rise. Its recent vigour coincides with historically high numbers of home sales in most regions of Canada, coupled with limited supply. The monthly jump of the unsmoothed HPI was even bigger 2.7%, the most of any month since July 2006, taking the unsmoothed index to a cumulative rise of 11.9% since last June (left chart). The rapid rise of home prices continues in the great majority of large Canadian cities, with prices up 10% or more from a year earlier in an unprecedented 81% of the 32 urban markets surveyed (right chart). However, the magnitude of the price rise varies with category of dwelling. In the main metropolitan markets the rise was much smaller for the condo segment than for single-family homes. Among the reasons for the difference is a shift of preferences away from small dwellings in city centres toward larger homes in suburbs. Source: https://housepriceindex.ca/2021/04/march2021/
How to tell between a real CRA call and a scam
(NC) Many of us have heard of scammers pretending to be from the Canada Revenue Agency. You may have even received a call or email yourself. But how do you know what you can trust? Avoiding this common scam is easier when you know what the agency will and wont do. The agency will never threaten you with immediate arrest or jail for a tax debt, and never uses text or instant messaging to communicate about taxes. It will never demand that you settle tax debt by buying gift cards or prepaid credit cards, or using cryptocurrency like Bitcoin, or offer to pay you a refund by e-transfer. Remain vigilant when you receive communication from someone claiming to be from the CRA, especially when asked for personal information such as a social insurance, credit card, bank account or passport number. If you are unsure that the person on the phone is a legitimate agency employee, ask for the agents phone number and badge number and call 1-800-959-8281 to validate the caller. If you receive a call demanding immediate payment, take time to think it over. If you believe it was legitimate, you can check the status of your account online. If you use online or telephone services, you can further protect yourself by keeping your access codes, user ID, passwords and PINs secret, and changing them frequently. Enabling email notifications for online CRA accounts will notify you by email of changes to them, warning you of potentially fraudulent activity. Finally, suspicious phone calls or messages can be reported to the Canadian Anti-Fraud Centre online or by telephone. If you think you have fallen victim to a scam, contact your local police. Find more information at canada.ca/taxes. www.newscanada.com