We know that the Covid-19 pandemic is going to significantly affect our lives. There also may be uncertainty about your own job security and your ability to pay your bills. Some of you are thinking “Does it make sense to buy and sell in this market?” or “What should I do if I lose my job and need to make my mortgage payments?”.

We have an excellent resource at https://www.mortgagecentre.com/covid-19 – it lists everything you need to know about mortgage deferral payments and what the government and your mortgage lender is doing to help you through this challenging time.

You can also check out this video where I discuss mortgage options for those whose credit history has been hurt by COVID-19: https://www.facebook.com/guelphmortgagecentre/videos/528809897836958/

Here is a list of the most commonly asked questions I’ve had from clients over the last two weeks. 

I’m worried about making my mortgage payments and other debt obligations, what should I do?

It’s super important that if you feel you won’t be able to make a mortgage payment to call your mortgage lender immediately to arrange a deferred payment. If you just miss a mortgage payment it will be detrimental to your credit history. However if you make arrangements in advance, it won’t.

If you are worried about other debts you have, be proactive and call us. There are good options available to consolidate your debts or re-amortize your mortgage to lower the monthly carrying costs. Please be sure to contact us before you see things slipping. You’ll end up with a better option if your credit history is still okay.

I’ve already purchased a home but it hasn’t closed yet, will my mortgage now be declined if I’m on unemployment insurance?

Most mortgage lenders will honour their commitments to close your mortgage, even though you’re on unemployment insurance. However, it’s important to contact us and let us know so we can inform the lender and there won’t be any issues on closing. If the lender decides to decline your mortgage, we can be proactive and arrange short-term alternative financing of a year or when you get back to work. It’s important to close on your purchase instead of defaulting on your commitment to buy the home. Why? You will not only likely lose your deposit but you could also be sued by the seller.

I’ve been pre-approved for a mortgage, but I’m not sure I will still be working. What should I do?

The main role of a pre-approval is to confirm the mortgage amount you can qualify for. If you have lost your job or are now on unemployment insurance there is a likelihood that you’ll need to redo the mortgage pre-approval with your new financial profile. I’ve had clients just recently purchase their first home as they have good income stability and see the opportunity to buy when other people don’t. If you’re a first-time buyer you probably won’t be in a competitive bid situation!

Why are mortgage rates going up while the Bank of Canada continues to lower rates?

Mortgage rates have gone up over the last couple of weeks and you have probably heard in the news that bond rates are lower and the Bank or Canada has lowered it’s overnight lending rate. Why have those rates gone down and mortgage rates gone up? The answer could be related to the deferral of mortgage payments by borrowers. The government hasn’t told banks how they will support them while borrowers take “holidays” on their payments.  Institutional mortgage lenders still have to pay their investors, regardless if people make their mortgage payment. Essentially the cost of borrowing has gone up for banks and they’re passing it over to people who can make their mortgage payments!

Our office continues to operate remotely, and we are doing appointments by phone and online – so contact us for any further questions you might have about your specific situation: /contact-us/