So, the unthinkable has happened and we’re forced to adapt - so much change, worry and uncertainty. Who would have thought we would be living through a depression & economic turmoil. Luckily, our leaders (and lenders) have stepped up to the plate and offered assistance for those who require it most. Here’s what you need to know about Mortgages right now and how the programs help you.
#1 - Deferred Mortgage Payments - Lenders have agreed to defer your mortgage payments on a case-by-case basis for up to 3 months; however, you are required to pay the interest on the loan and you will also be charged interest at the end for the extended period of time as well. A saving grace of this deferral program is that the lenders aren’t reporting the missed payments to the credit bureau so it will not show as a missed payment once this all blows over.
#2 - Document Requirements - Lenders are seeing the added risk involved in lending, thus requesting all documents be submitted up front with the pre-approval request; you’ll need to submit a recent pay stub, job letter (current-dated) and your last 2 years’ T4/T1G - in addition, Notice of assessments for the last two years (to show you are in good standing with government accounts) as well as any Tax receipts for the current year.
#3 - The Lending rate - Bank of Canada has been lowering their lending rate to help stabilize and perhaps
recuperate the economy. But, what you need to know is that just because the BOC decides to lower their lending rate, it doesn’t necessarily mean that you will reap the benefits in your bank account. However, as enticing as the lower rates may seem, home buyers (it seems) aren't jumping in with the uncertainty in the market and global economic state. Is it really a favourable market to be house buying? Depends on your level of comfort. For those who currently own, a refinance might be a benefit and may outdraw the penalties involved (which is different for each lender). Find out what is right for you - the guidance of a mortgage professional can help you make sense of it all!
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Sharon Abrego Mortgage Agent, Mortgage Alliance