Deferring your mortgage payments was an option provided by Canadian mortgage lenders in response to Covid 19. Many Canadians were directly impacted by the virus and experienced disruption to their income or just a lot of uncertainty in general. Payment deferrals were a great tool to relieve some financial pressure.
As Mortgage Advisors, we were concerned that deferred payments may be reported to your credit bureau as a missed or late payment which would result in damage to your credit history. Fortunately, this has not been the case.
If, however, you are looking to make changes to your mortgage for the purpose of refinancing or purchasing, your lender or new lender, will ask that your existing mortgage payments be take out deferral. The mortgage provider needs see that you are in a position to manage your regular mortgage payments before they will extend any additional financing.
Taking Your Mortgage Out Of Deferral
Removing your mortgage from payment deferral is as easy as contacting your mortgage lender to make the request. Be sure to obtain confirmation in writing that the request has been fulfilled. It’s a good idea to have on-hand for record keeping purposes but also to present to your mortgage broker or mortgage lender if are you applying any additional financing.
Checking Your Credit Report
Reviewing your credit report on a semi annual basis is a good idea. Sometimes there are reporting errors from your creditors to Equifax or Transunion which should be rectified.
If you have deferred your mortgage or credit card payments, it would be prudent to review your report again, once the payments are back on a regular schedule. You want to ensure the deferral was coded correctly on your report to begin with and that the deferral status has been properly removed.
Please contact us with any questions about mortgage deferrals or about mortgage planning in general. We understand that deferring payments is not a blanket solution for all Canadian homeowners.
