Chances are your finances have been negatively affected by COVID-19 and you’re deferring your mortgage payments. It’s important to note that your credit report will show these deferrals.
Typically, one’s credit report will indicate that there were deferrals for the last two months after payment of the mortgage for a couple of months. Also, it states that current mortgage payments are in deferral.
When the credit bureau reports a deferred status, many people think that’s great. Financially, a significant part of the population has been hit hard by the novel corona virus pandemic. The deferred payments may lead to reporting errors on credit bureaus – this is something that many financial gurus questioned. The good thing is that there’s a system dedicated to reporting deferrals.
Reporting errors from deferrals is one factor that may lower your credit score, and not deferring your mortgage payment as many people wrongfully believe. Obtaining a copy of your credit report to look for errors is wise move once you start making your payments again.
Why is this information important to me at the moment?
You may be thinking about making changes to your mortgage. The truth is, a majority of the lenders will be reluctant to lend you extra cash when you’re unable to make your current mortgage payments. It’s what usually happens if you are considering refinancing your existing mortgage, moving into a new property or renewing.
In short, if you are planning to adjust your mortgage, it would be a great idea to continue paying for your current mortgage prior to getting a new one.
This is more reason than ever to seek the advice of a Mortgage Broker!
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