Many people are facing financial pressure right now due to the global COVID-19 pandemic. Families have lost jobs, lost breadwinners, and have been placed in unique financial circumstances. If you need mortgage support you should not hesitate to speak with a mortgage specialist from your mortgage provider. Check out their websites to find support phone numbers where you can reach specialists.
Lenders are aware of the challenges and are willing to provide support to meet the needs of their customers. Some have options to even offer long-term support for those who are facing challenging financial circumstances.
You will find some offering;
- Payment relief
- Interest relief measures
- Payment deferrals
- Mortgage forbearance, and more.
To note, taking payment deferrals may not be the best option if you have income coming in. This is because the deferred interest will be added to your outstanding balance later and further interest will be accumulating on your new balance. So be sure to ask the pertinent questions before choosing this option. If you must choose the payment deferral option, here are some ways to deal with while helping to keep your balance from ballooning too much.
Make a Single Prepayment
If and when your circumstances improve and you have the ability to make one lump sum payment in the amount of your deferred payment this will provide a reduction in the life of your mortgage.
Persons with the standard closed mortgage have the ability to prepay up to a particular percentage of their original principal amount once in an annual period.
The prepayment will be applied directly to your mortgage principal. When you get to your renewal date you have the option of making any amount of prepayments to your principal and even have the option for paying off the entire mortgage as well as the option for refinancing without any prepayment charges.
Make Extra Payments
Most lenders offer you the option to make extra payments. Find out what your lender allows, for some the extra payments can only be made on the payment date and for others, you can only pay up to a certain amount extra each payment period.
Any extra payment made is applied to the principal balance and this will end up reducing the life of your mortgage while also saving you money in interest costs.
Increase Your Payments After the Deferral Period
Typically, you can increase the amount of your payment by up to 10% once in each annual period. The increased payment, of course, goes directly to your principal which means your total interest charges will decrease. This will earn you some savings in the longer term.
Refinancing your Mortgage
If your situation puts you in need of additional funds you may have the option to refinance your mortgage. You can make use of the equity in your home to refinance your current mortgage. This will allow you to readjust the terms and rates of your mortgage. This often works out to be a better way to borrow money rather than taking out an additional loan to meet your needs.
If you opt to take this route there are a number of variables that you will need to consider. Your mortgage specialist can help you to cover everything in detail. This way you can decide what is the best option for your situation and your needs.
You can refinance with your current lender or take a look at mortgage rates in British Columbia to see which lender will provide the best option.
If you are a student there may be additional housing resources available to you that are not mentioned above.
We hope this information helps you to navigate these difficult times. If you have any tips or advice to add, we’d love to hear in the comments. If you arent already a homeowner and think this is the right time to build, contact us today so we can turn your dream of owning a home into a reality.