Financial Help in Extraordinary Times

Canadian families are facing new financial challenges as job layoffs, school closures and uncertainty escalate. However, there are bright spots, and it's time to take a serious look at restructuring your finances. Do you need help?

It's time for action. There are several things you can do today to put your finances in order and take advantage of a rather unexpected opportunity! Amid the chaos, interest rates have dropped back down to all-time lows, but they won't stay here for long!

The Government has also pledged billions in support of Canadian workers and businesses. The Prime Minister addressed the nation for a third consecutive day. Today's comments included an announcement of a stimulus package designed to provide financial assurances to those citizens and businesses which are impacted by the covid-19 pandemic.

Here is what you should consider today:

1.  Is it time to refinance your mortgage early? You may have to pay penalties to break a fixed or variable term mortgage, but you could save thousands on interest at these low rates. It's time to review your mortgage and check out the options. Be prepared for extra processing time right now, so start early.

2.  Are you retired and need to improve your cash flow? Rates are low, the opportunities when you are retired are few when it comes to obtaining credit. Today is the best time to look at eliminating your mortgage payments and debt payments for a payment optional plan. Selling, moving, and downsizing is not everyone's best or only alternative.

3.  Do you have a backup plan to cover expenses should your income be disrupted? A secured line of credit is the perfect option for emergencies and putting this in place today when you don't need it is the best course of action. For self-employed individuals, this is critical in today's climate.

4.  Does your mortgage term mature this year, or are you planning to purchase a new home? Now is the time to arrange a mortgage review, prequalify (not preapprove which not sufficient) and secure an interest rate hold at viable lenders. You can do this with a Mortgage Broker who has multiple lender options and will provide you with customized service and advice.

5.  Review the Government Financial Assistance Plan provided at the bottom with links to more details, to see what might apply to your situation.

The current crisis is extreme, but it won't last forever. The key to eliminating unnecessary financial hardship is to be proactive and put your finances in order. This period is also an opportunity to restructure, get rid of high-cost debt, put an emergency backup plan into your mortgage, prepare for a better retirement, and save money so that your family is better off in the long run. Isn't that what financial planning is all about? 

Obtaining the proper advice from a Mortgage Broker who focuses strictly on mortgages and who deals with a wide variety of lenders is your best choice to navigate this complex financial crisis. A Mortgage Broker can make sure that the options you choose are right for your particular situation. Please feel free to call or email if you have any questions. If you are ready to take action, book an appointment here and let's talk: https://calendly.com/winonar/mortgage-consultation-by-telephone.

GOVERNMENT FINANCIAL STIMULUS PLAN:

Headline commitment

• Up to $27 Billion in direct support for Canadian workers and businesses.

Details here.

Employment Insurance highlights

• Emergency care benefits for those who need to stay home due to illness

Details here

• Emergency support benefits for those not regularly eligible for EI

Details here

Business support highlights

• Temporary withholding tax subsidy of 10% for small businesses employers, up to $25,000.

Details here

Tax highlights:

• Tax filing deadline for individuals extended until June 1

Details here

• New tax payments owing deferred until Aug 1

Details here.

Other initiatives

• Boosting the GST credit and Canada Child Benefit payments

Details here

• Moratorium on student loan repayments

Details here

• Boosting funding for First Nations communities, persons experiencing homelessness, and women and children fleeing violence

NOTE: Much of this plan will need to be to enacted by Parliament, with an expectation that payments could begin to arrive in early April.

ADDITIONAL UPDATES IMPACTING THE BANKING AND LENDING SECTOR

CMHC will be purchasing up to $50 Billion of insured mortgage pools. This is expected to significantly aid lender liquidity.

Details here

CMHC will also be permitting lenders to allow mortgage payment deferrals. Canada's 6 largest banks have stated that they will be working with clients on a case-by-case basis to determine deferral solutions.

Details here

Interest rates and the bond market continue to experience volatility, and despite extensive measures designed to boost liquidity, there continues to be upwards pressure on Canadian mortgage rates at this time.