Mortgage deferrals were a massive relief for many of us dealing with the financial uncertainty brought on by the COVID-19 pandemic. However, as the mortgage deferral rules tighten, experts are warning that it’s time to assess your ability to pay. Our brokers can assist you by doing a mortgage analysis for you on your existing mortgage.
Thanks to regulatory changes made by the Office of the Superintendent of Financial Institutions, mortgage deferrals are going to be harder to get and this means it’s time to have tough conversations about your ability to resume mortgage payments.
The Office of the Superintendent of Financial Institutions says deferrals granted in September will be able to get special capital treatments for loan and premium payments for up to 3 months, rather than 6 months. For banks, the rules mean they won’t be subject to higher capital requirements because the deferred mortgages won’t be considered past-due.
The majority of the mortgage deferrals banks faced, were approved in March and April as the pandemic took an economic toll on the country with non-essential businesses shuttered and millions out of work or watching their incomes crash.
As of July 30th, there were roughly $170 billion in outstanding residential mortgage deferrals for the large 6 banks, with the majority set to mature over the next 2 months. Come October, the special rules implemented as a result of the pandemic, will be removed.
The director of Canadian Mortgage Brokers Association of BC said: ‘Homeowners should be prepared for how they’re going to manage their mortgage payments going forward. It’s uncertain as to whether they’ll be able to get additional deferrals beyond the current deferral period and going forward there really has to be a plan in place if they don’t get that deferral extension. What does that mean for you and me? Should I be finding a source of income so I can make those mortgage payments, or should I be putting my house on the market. All these things have to be considered.”
If you are in need of mortgage advice, don’t hesitate to contact one of our experienced brokers.
Original articles: www.citynews1130.com