Mortgage Deferrals in Vancouver During COVID 19
Last week we caught up with Niki Cuthbert from Ask About Mortgages about mortgage deferrals in Vancouver during COVID 19! Check out the question and answer video featuring Leo and Niki. They discuss everything you need to know about mortgage deferrals and what people should be doing now.
Watch the video or follow along below for the video transcript.
Leo: Hi everyone. We’ve been getting a lot of questions about the mortgage deferral process. I figured I’d bring on my mortgage broker who I pretty much send everyone to. She’s done my personal mortgages and helped a lot of my clients for the past 10 years we’ve been working together
Niki: Or for longer!
Leo: Yeah maybe longer! This is Niki, I figured she would introduce herself and we would jump right into it.
Niki: Hi I’m Niki Cuthbert from Ask About Mortgages, part of Mortgage Architects.
Leo: Perfect. So you’ve been doing this for a long time right?
Niki: I think it’s almost 12 years?
Leo: There you go. I think we’re around the same time in the business. Anyways, we started working together a long time ago. But, we’ll jump right into it here. As we do this too, please feel free to leave questions in the comments. We’re going to try to do this as often as possible. Things are changing, with not just with the deferral process, but mortgage rates and mortgage approvals. There’s a whole lot going around out there. Today we will focus on the deferrals and hopefully we will get more sessions down the road as we get more questions coming in. Sounds good?
Niki: Sounds good.
Mortgage Deferrals in Vancouver During COVID 19
Leo: What is the mortgage deferral system?
Niki: Every lender’s mortgage deferral process is different. It is specifically in place for people affected negatively by COVID 19. It is only for the people who are negatively affected by it whose income or financial situation have been changed by it.
Criteria for Mortgage Deferrals
Leo: Okay, from what I know, there are certain criteria that they have to meet? Have you been dealing with a lot of them?
Niki: Well I don’t deal with them personally, so every client has to either call, email or do an online requiry with their lender specifically. I cannot do it on their behalf. Evey lender’s process is different. I heard some are actually reunderwriting, looking for letters of employment saying that they are terminated or no longer working. Then I’ve personally been on the call for ones where some lenders ask “Has your income been affected by covid?”, “Yes.”, “Okay you’ve been approved for a 6 month deferral.”
Niki: Yeah so every lender is doing it completely different. So I would suggest reaching out to your lender directly. Or if you have any questions, you can ask me and I can tell you specifically what I have heard your lender doing and point you in the right direction on how to reach out to them.
Leo: Okay cool. Well that’s fair enough. I guess everyone is different.
How the Mortgage Deferral System Works
Leo: Can you explain to everyone how it works? Let’s say there’s a raw number here. You’ve got a mortgage of $400,000. Your interest is $1,000. So they defer it for 6 months. What happens after 6 months or is it different again for every lender?
Niki: Every lender is different. Not every lender is deferring for 6 months. Some are allowing a “Skip a Payment” for a month. Others are 3 months. Then there are some re evaluating after each month with the clients.
Leo: Oh okay.
Niki: Different lenders are doing it different ways. Some are adding it to the amortization. Some are actually adding it to the end of the term. So after your 5 year term is up, your payment will increase to cover the extra interest that has accrued. So it’s really important that people know, this is not free money. You will eventually have to repay this.
Leo: Yeah like any loan, just like taxes, they will get you eventually I guess right?
Niki: Yeah. Some are being more generous than others in their repayment. But there are some where your payments after your 5 year term are going to go up substantially if you defer for 6 months.
Leo: Okay so I guess it seems like every lender is different on every single aspect. So there is no cut and dry answer who’s gonna do what. You have to call them, see what they’re offering, see how it works and see if it works for you?
Niki: So I’ve been telling people. Even if I wasn’t your broker that did your mortgage. That’s fine. I’ve tried to do the research to find out what every lender is doing individually. And every lender has an efficient way that you can reach out to them. A lot of them now have online inquiry systems. But they do have a specific division for mortgage deferrals. So you will have to deal with that department. I can help point people in the right direction and tell them what I’ve seen the lender do previously, which could change daily.
Mortgage Deferral Time Length
Leo: Yeah okay. Do people find that it’s taking a long time to get the answer? Or is it happening pretty quick?
Niki: Yeah it’s been a long process. It really depends on the lender again. Some lenders I have see them turn around in 1 day. Some lenders have online portals that you can sign in and go on and skip a payment, take a payment vacation and that’s effective immediately. So you can do that in 5 minutes. Other clients I had were waiting 8 days to hear back from their lender. I feel like now they are coming up with more efficient systems so it is getting faster.
Leo: Gotcha, so it seems like everyone should find out the right contact info for their specific lender. Get in touch with them. I’m sure there’s also a bunch of information available on that lender’s information platform they are sharing it from. Then go from there type of thing.
Niki: Make sure you give yourself at least 10 days before your next mortgage payment if you are going to defer this because it is quite a lengthy process.
Leo: Yeah okay that makes sense. Anything else people should know about the mortgage deferrals and what they should do?
Niki: Everything changes daily, so that’s about it over here!