Updated: May 19
Have you been thinking about getting a mortgage deferral, but are unsure about the finer details and potential pitfalls? Jon from the Lambert Group wants you to meet Sam - he has recently been laid off and is looking for some financial breathing room, so he went searching for the internet for more information and found a mortgage deferral calculator. While it may look like an attractive offer at first, Jon helps us understand why it may not be such an ideal situation after all...
Here is some additional information we want you to be aware of before making that decision:
With the COVID epidemic a lot of people have been laid off work, and unfortunately are struggling to make ends meet. We recently found out about options to defer mortgage payments, which most figure can buy them some breathing room. But before making any big decisions, please go to a mortgage payment deferral calculator (which can be found on line) to see what it looks like!
Let's say an average mortgage payment is $1,000 per month. If you skip a payment and defer it over a 20 year amortization, it will cost $941.66 in interest.
Now, if you decide to defer payments for five months, it will cost a total of $4,708, and you still need to pay back the initial $5,000 which was deferred!
We think this must be an absolute last resort and recommend looking into other options to save money before making this decision ....
Review your monthly budget and expenses to see where you can save some money
Try to sell some unused items (spring cleaning??)
Review monthly bills/expenses and see if here are cheaper alternatives (examples include phone bills, internet, insurance, subscriptions, etc.)