Skip a mortgage payment

[crosswire]

Can you skip a payment or 2 with your mortgage if you really need to
I know bmo offers something like that but not sure about cibc.My friend asked them about it but they said no.

[spf1971]

If your friend already asked the bank and they said no, I'm going to guess the answer is no. The bank that lends the money, the same bank that sets its own policies generally knows what is and isn't allowed.

[crosswire]

well that sucks..so even she is out of a job she cant put the payments on hold

[Narci]

well that sucks..so even she is out of a job she cant put the payments on hold

There wouldn't be a subprime mess if everyone could put thier mortgage payments on hold.

But I know what you mean, put on hold for a payment or 2 (i'm guessing waiting for EI cheques?).

If that's the case, your friend might consider selling the place while the market is hot and rent for a bit.

[sjweyman]

With RBC, I believe I am allowed to skip 1 payment per year. On top of that I'm allowed to skip as many payments as I want to upto the amount that I have overpayed on the mortgage from double up payments and lump sum payments. This is what my banker told me ... I haven't put it to the test yet to see if there are any catches.

I could go without paying my mortgage for several years at the moment so that's comforting if I ever run into a situation where I have to do that.

[crosswire]

ah ok thanks for responses
Well she lost her job,EI is taking forever to come through, she is single and away from home and alone in the city too.
She did get interview but job wont start in 2 ,3 months

[dakrwurm]

Here is the link to the CMHC web site about dealing with Mortgage Payment Difficulties.
http://www.cmhc-schl.gc.ca/en/co/co_005.cfm


And Genworths.
http://www.genworth.ca/content/genworth/ca/en/services/for_lenders/hoa.html

Not much info but maybe it might help.

[dcaron9999]

On numerous occasions, Ive heard banks much prefer sitting with you to discuss about alternatives ahead of such an event, rather than having you default. It is a big constraint for them to seize you house, put it up for sale, pay taxes, and lose money trying to sell the house via an agent, in a slow market. Your friend should attempt to negotiate with the branch manager face to face.

This is where having an emergevcy fund to cover 3-6 months of fixed mandatory expenses could have helped ...

[jerrysiz]

On numerous occasions, Ive heard banks much prefer sitting with you to discuss about alternatives ahead of such an event, rather than having you default. It is a big constraint for them to seize you house, put it up for sale, pay taxes, and lose money trying to sell the house via an agent, in a slow market. Your friend should attempt to negotiate with the branch manager face to face.


+1 She should talk to them. If she has been making her payments regularly up until this point they will likely be willing to work with her once she explains her situation.

[GSRee]

On top of that I'm allowed to skip as many payments as I want to upto the amount that I have overpayed on the mortgage from double up payments and lump sum payments.

BMO was the same...they kept sending me letters saying "you've paid $xxx more than necessary, why not take some of that back and go on vacation or something!" I don't think they like people using the prepayment features and saving interest!

[BartBandy]

BMO was the same...they kept sending me letters saying "you've paid $xxx more than necessary, why not take some of that back and go on vacation or something!" I don't think they like people using the prepayment features and saving interest!

That is evil. We amortized our mortgage over a longer period than we had to, then doubled the payments. If one of us lost our job, we could just revert to the regular payment. If we had extra money, we could contribute additional lump sums up to 15% (iirc) of the original principal, without penalty. And we still had a savings account for contingency.

If you own a house, you need to keep some money back.

But for the bank to openly suggest not accelerating your mortgage, that's just evil.

[dcaron9999]

We amortized our mortgage over a longer period than we had to, then doubled the payments. If one of us lost our job, we could just revert to the regular payment. If we had extra money, we could contribute additional lump sums up to 15% (iirc) of the original principal, without penalty. And we still had a savings account for contingency.If you own a house, you need to keep some money back.
Very wise strategy.

We opted for a 30 year when I new we could afford a 25 year. We started doubling (almost) our payments 1 year into our 7-year term. I realize now that we could have signed up for a 40 year when it was still available in Canada, while maintaining our accelerated pre-payment approach. This would have provided slightly lower monthly expenses (bigger cashflow) in case of an emergency, such as a loss of one income, etc.

[randomthoughts]

With RBC, I believe I am allowed to skip 1 payment per year. On top of that I'm allowed to skip as many payments as I want to upto the amount that I have overpayed on the mortgage from double up payments and lump sum payments. This is what my banker told me ... I haven't put it to the test yet to see if there are any catches.

I could go without paying my mortgage for several years at the moment so that's comforting if I ever run into a situation where I have to do that.

Seriously? I'm with RBC as well and I had no idea... Not that I intend on doing it, but would definitely be good to know if that's an option.

[randomthoughts]

http://www.rbcroyalbank.com/products/mortgages/skip_a_payment.html

Wow, yup, totally.

"If you wish, you can repay your skipped payment anytime during the term of your mortgage. If you have made double-up payments during the term of your mortgage, you have the option to skip an equal amount of payments."

I've doubled my payments for the last 3 years, so... good to know! It definitely has an impact on how much of an emergency fund I need to keep available.

Also, there's an "Extended Skip A Payment" which will let you defer payments for 4 months (but will increase the amortization), if your credit allows.

[sjweyman]

Thanks for the confirmation. I remember reading it on their site now too. Very useful indeed!