Now What? Mortgage Deferrals are Ending

What happens to mortgage clients once deferrals are ending? How would this news affect the housing market? Are financial institutions now happy they will receive payments?

Let’s examine what could happen when mortgage deferrals are ending.

There could be no one in society who would have predicted the consequences of the pandemic. The human loss, job losses, layoffs, bankruptcies, mental misery and overall negativity has affected almost every Canadian. The housing market, although not so apparent, as been affected as well. More than half a million families have elected to defer their mortgage payments.

The problem is that the pandemic is not over and for the most part, Canadians have not returned to work. The CEO of CMHC commented that 20% of mortgages could go in arrears. This is scary to the bankers but most importantly to the average Canadian and the overall economy. Imagine if only 10% decline the affect it would have on housing and prices. This is why mortgage lenders are scared. In discussions with my colleague Sean Howard, we really believe at Robert Floris’ Mortgage Architects office that new forms of mortgage relief are on the way.

What Help Could Come When Deferrals Are Ending?

1. Additional Deferrals – The mortgage companies will give you further time to pay your mortgage.
2. Extended Amortizations – If your mortgage is currently at 2 years, they may change it to 30, 35 or 40 years to lower the payment.
3. Special Re-Payment Situations – This one is tricky where individuals will take unique situations to catch up their payments.
4. Capitalize the Payments – Capitalize the payments simply means adding all the interest payments missed to the total balance. As an example, if your balance on your mortgage is $250,000 and you missed $15,000 of interest payments, your new balance is now $265,000.

We are very confident that new help will come for Canadians. Why? Similar countries like England and Australia have already come to the rescue to help mortgagors in their respective countries. As well, nobody wants a housing collapse, this would be catastrophic to the rest of the economy. Mortgage lenders will insist on additional support. Mortgage lenders and financial institutions will scrutinize the process more than they did 6 months ago. The average Canadian must be prepared to prove that they are still in economic peril and will have to describe their potential future.

Good News

The great news for the overall Canadian economy is that these measures will help keep up or prop us all up. If you’re a mortgagor who legitimately needs help, new plans should be on the way. Eventually, we must face the music and that is the day where things will change.

Robert Floris has been in the mortgage industry for 30 years, including working as a Sales Manager for a major chartered bank. Over his career, he has personally lent over 1 billion dollars and proudly continues to advise and tutor his valuable clients.

Robert Floris has been in the mortgage industry for 30 years, including working as a Sales Manager for a major chartered bank. Over his career, he has personally lent over 1 billion dollars and proudly continues to advise and tutor his valuable clients.

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

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