Understanding the Mortgage Payment Deferral Program 
 
Many Canadian homeowners are likely wondering how they are going to pay their mortgage over the next several months due to events and closures surrounding COVID-19. 
Those facing financial hardship due to unemployment or reduced employment may be eligible for a mortgage payment deferral of up to six months
Our Mortgage Broker partners
 have broken down the facts to help you better understand what the program offers and how this may affect you.  Please note, the deferral is an agreement between you and your lender so it is important to connect with them directly should you require deferment. 
10 Important Facts about the Mortgage Payment Deferral Programme

1.         Offered at Discretion
The mortgage payment deferral program is offered at the sole discretion of Lenders as they maintain the legal right to timely repayment of their mortgages.
 

2.         Not off the Hook
Mortgage payments will not be forgiven by your lender. The program simply allows borrowers to repay back the money they owe to their lender, with interest over a period of time.
 

3.         You must Demonstrate Financial Hardship
Undergoing a true financial hardship that would prevent one from making their mortgage payments must be evident. Job loss resulting in al or minimal income and no reserve fund. You will be required to provide a detailed report on assets, income and expenses.
 

4.         Be Patient

Lender call wait times are higher than normal and it is recommended to avoid or postpone calling your lender unless you require deferred mortgage payments and you think you will qualify.
 

5.         Credit Is not Affected
A lender-approved deferment is not considered a missed payment and will not appear on your credit report. Some lenders are even offering to waive any associated fees during the COVID-19 crisis.
 

6.         Capped at Six Months
 Lenders will typically cap a deferred mortgage payment program at six months.
 

7.         Communication is Key
It is essential to remain in communication with your lender. If you believe you are going to miss a payment, call and/or email your lender and advise as soon as possible. Some lenders may waive NSF fees if you’ve missed a payment and there is a record of you trying to notify them in advance.
 

8.         Property Tax and Insurance Premiums
Property tax installments and insurance premiums must continue to be paid. The deferred mortgage payment program only applies to your mortgage payment only. It is recommended to connect with your municipality and/or insurance company separately if they are offering a similar program to provide financial assistance.
 

9.         Other Options
There are often other options available to assist you in financial hardships such as refinancing your existing mortgage (Subject to qualification). restore your original amortization to lower your payment amount, hold a payment during a temporary suspension of income, or offer you a reduced payment during a specific time period. Please note, interest-only payments are not available.
 

10.       Landlords and Tenants
Landlords with tenants who have stopped making rent payments may also be considered for the deferred mortgage payment program.
 
With courtesy from and Published in an article by The Mortgage Group.

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