03 Jul Mortgage payment difficulties & deferrals
If there is one thing we’ve all learned with Covid-19 is that unforeseen circumstances can show up at any time and have an impact on our finances, especially on our ability to make regular mortgage payments. With early intervention, cooperation, and a well executed plan, you can work together with your mortgage professional to find a solution to your financial difficulties.
What can you do?
Talk to us. We can help you try to successfully manage your financial situation through early intervention. It is important to keep us informed as things evolve.
Have a clear idea of your financial situation. In order to help us fully understand your financial situation, before meeting with us, prepare a detailed list of financial obligations including any credit cards, loans, household bills with the amounts owing and their due dates. Be sure to include information about your current income, savings accounts, investments, and any other assets.
What is a mortgage payment deferral?
It is an agreement between you and your lender. Typically, the agreement indicates that you and your lender have agreed to pause or suspend your mortgage payments for a certain amount of time. It’s also known as a mortgage payment deferral agreement or mortgage forbearance agreement and it’s a temporary measure. After the agreement ends, your mortgage payments return to normal and the missed payments — including principal and accumulated interest – repaid.
It is important to remember the mortgage deferral agreement does not cancel, erase or eliminate the amount owed on your mortgage. At the end of the agreement, you will have to resume payment according to your regular payment schedule AND the interest that hasn’t been paid during the deferral period continues to be added to the outstanding principal of your mortgage. This can affect the total amount you owe in accordance with the original payment schedule.
Last, but not least, mortgage payment deferrals focus solely on your mortgage. It won’t affect other payments regularly withdrawn, like property taxes and life/disability insurance. Let us know how we can help you if you find yourself in this situation.