One month ago, I posted a video about the mortgage stress test being eased a little. This was due to happen on April 6th. The government’s agenda has changed a lot in the last month and the change to the stress test rule has been postponed indefinitely as a result of COVID-19. On a side note, the interest rate that the current stress test is based on has been lowered from 5.19% to 5.04%, making it just a little easier to qualify for a mortgage anyway.
If you feel the need to defer your mortgage payments, you can apply directly with your mortgage lender. They’ll make a decision to defer your mortgage payments or not for up to six months. Be prepared to state your reasons for needing this mortgage payment relief.
Some banks and mortgage companies have been quick to set up online portals and dedicated phone numbers to handle the massive volume of inquiries and applications. I urge you to be patient because you’re still overwhelmed with people contacting them. Also, the interest you’ll be paying will be added to your mortgage. This isn’t a bad thing in my opinion, because we’re also going to be able to borrow money if you need it and it’s at the same interest rate as your mortgage interest rate, which is a pretty low rate compared to a credit card.
If you’re applying for a mortgage right now, banks may want to confirm that you’re still employed closer to your possession date if you’re actually buying a home. If you’re not working and you’re temporarily laid off due to COVID-19, you may still get your mortgage funded. If you’re doing a refinance and you’re temporarily laid off due to COVID-19, the bank may want to delay your funding of the new mortgage until you’re actually working again then.
In any case, stay in close contact with your mortgage broker who is staying on top of what’s going on in the mortgage industry. Things are changing every week. In the meantime, they stay safe, be healthy, and please stay home.