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April 1, 2020 SEP Dev

Mortgage Deferral Aka Mortgage Payment Deferral & Relief

As many of our clients have heard, the major banks such as TD Bank, RBC, Scotiabank, CIBC, BMO, etc. have announced their efforts to help those clients in need of some mortgage payment relief. When this was first announced earlier in March 2020, the banks proposed that they would offer mortgage deferral to their clients. Although this is technically true, it is only approved on a case by case basis. In other words, the banks would need to assess each request for mortgage payment deferral, and this suggests not everyone would qualify for this mortgage payment relief.

After some time, we’ve learned that the banks are only offering this as a last resort and will opt to explore other available options. For example, most of the banks offer mortgages with features such as “skip a payment” or “mortgage vacation”. These features allow homeowners to defer their mortgage payment for a period of time as described in their mortgage agreement. If, however you have already exhausted these features, then the bank would move to see if you would qualify for further assistance.

As mentioned before, this remedy is not for every single request by homeowners, but rather for those who absolutely need such relief by deferring their mortgage payment. This means, that you would need to have suffered a direct temporary/permanent loss of job or income as a result of the Covid-19 pandemic. There is some grey area in the qualification of those who would be approved for mortgage deferral by the banks, but borrowers would need to prove their stated hardships. For example, if you are claiming that you are experiencing a loss of income due to a recent job loss or are self isolating due to contracting covid-19, then you may need to provide a letter from your employer or a health professional that substantiates your claim…

OUR RECCOMENDATIONS FIRST:

  1. Assess how the covid-19 pandemic has affected your monthly cashflow
  2. Reduce unnecessary expenses within your household
  3. Look into your available mortgage features (I.e. “skip a payment”)
  4. Look into your available Savings

IF YOU ARE STILL IN A BIND, THEN:

  1. Gather documentation that can substantiate your current hardships
  2. Call the bank that holds your mortgage to discuss your options

If you are in a situation that requires you to seek mortgage deferral from the banks, then you are likely to be more successful with your request by following the steps outlined above. If you can demonstrate to the banks that you have exhausted all other options, then they are more likely to work with you on your mortgage deferral request

If you have any questions regarding mortgage deferrals (mortgage payment deferral) or would like to explore other options such as refinancing your mortgage or leveraging your equity through these difficult times, please give us a call today – 905.455.5005.