REC's Best Mortgage Practices During Covid 19

So many property owners are concerned about the current status of mortgage rates and rules during 
COVID-19. It appears that so much is influx during this time, but this is not really the case. The Toronto 
real estate industry is not really impacted financially by the pandemic.   

All banks have reduced their interest rates tremendously since the beginning of isolation. People all 
across the Greater Toronto Area were looking to refinance their mortgages, to the point that lending 
institutions were overwhelmed. Banks are now starting to tighten up their requirements, they want 
confirmation of income at the very beginning to ensure that it can be afforded due to so many layoffs 
happening and to avoid a request for deferred mortgages. 

If you can prove that you will continue to have a solid income, the process will be the same for 
residential real estate. Commercial mortgages are taking significantly longer than usual as lenders are 
being impacted by the introduction of government initiatives. At this time, when people are purchasing 
they have to be more patient and sellers have to be more open minded.   

We always recommend using an independent mortgage brokers because they work for you, which 
is unlike the banks. The banks can still offer a strong rate, but it may not be the most beneficial to 
you and they’ll only find the best rate at their own institution. Independent brokers have connections
and the precise expertise to help people in their unique circumstance. Shopping around is not 
favourable as multiple inquiries for rates can have a negative influence on your credit score.    

This is probably the busiest time in history for private lending, so many people are going to want 
financing to get back to their normal in their investments. Private money is recession proof which 
makes it so appealing, now is a positive time to invest in mortgages. Unfortunately, for those 
borrowing there is more demand than supply, and interests rates will be increasing for borrowing.    

For residential properties, lenders will view your income when you apply for your mortgage by 
determining if your layoff is permanent or just for the duration of COVID-19. As for commercial 
mortgages, your personal income doesn’t really matter as the property will service the debt. Now 
is a positive time to utilize these opportunities, but only if you are financially comfortable. Utilize 
government incentives and work with your landlord if you are struggling. Don’t be afraid to reach
out to people if necessary.     

Most people can still pay their mortgage during this pandemic. Optimism is still high for the majority 
of those who own real estate right now, which is appropriate given the numbers. Private lending is 
more or less the same in activity right now, but there are more opportunities. Our prediction for 
mortgage terms in the next 6 months to a year is that they are going to stay low to keep the market 
as stable as possible.