The virus and your mortgage

The uncertainty of Covid-19 and its potential impact dominates many conversations. And grocery stores.

Speculation as to how this pandemic will affect us and those around us has created an uncertain and unsettling situation.

I initially thought because I don’t need to meet clients face to face, my work could carry on with minimal interruption.

After a group I belong to chatted about how Covid-19 might affect our businesses and our lives, I realized it will likely impact my world more than I thought.

This has been a bit of an eye opener as my original thoughts were focused on my day-to-day activities, and upcoming plans that will be changing. Because I can work from almost anywhere and am set up to help clients virtually, I was thinking of streamlining my home office.

I hadn’t thought much of how the lender partners I work with might be affected.

How might this pandemic affect your mortgage?

This depends on whether you have an existing mortgage, or if you are in the process of buying a home.

Canada Mortgage and Housing Corporation (CMHC) announced that they are working with Genworth and Canada Guaranty (these are the three mortgage insurers that lenders work with when clients purchase homes with less than twenty per cent down payment).

They are looking to provide relief for Canadians who currently have mortgages and are impacted financially by Covid-19.

I haven’t seen any official updates yet, but it looks like the insurers are amending their programs to allow for up to six months of payment flexibility. This might look like:

• Deferring payments
• Re-amortizing the mortgage
• Capitalizing outstanding interest into the mortgage
• Special payment arrangements

How individual lenders choose to apply this relief is not yet known. If your income is affected and you are concerned about making your mortgage payment, it is essential that you reach out to your mortgage lender as soon as possible to discuss what options they have to support you.

How the virus might affect you if you are in the process of buying a home?

There are several (many) ways this pandemic might affect you. There are a few things I suggest you do if your purchase is closing over the next few weeks.

Reach out to your realtor, mortgage lender, and lawyer/notary to see if they anticipate any challenges.

My expectation is that most firms will be proactive in making arrangements to limit personal contact to keep everyone involved as healthy as possible.

One challenge I’ve heard of (not in the Okanagan yet) is access to timely appraisals. In some markets, people are having difficulties arranging timely appraisals as firms are choosing to take time off to avoid potential exposure to the virus.

I had a discussion with one of my favourite lenders Friday afternoon. They have made arrangements for the majority of their staff to work from home to maintain their turnaround times and amazing client service.

If you are writing an offer to purchase a home, ask for a few extra days for your subject removal in case your approval is delayed.

Delays may happen due to staffing issues with either your lender or the other professionals involved with your approval (home inspector, legal representative, etc.).

As more information becomes available regarding how lenders will support their clients affected by Covid-19, we will do our best to share it publicly. 

Feel free to reach out if there is any way we can potentially help. Hoping that you and your loved ones navigate through this safely.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.