The duration of a mortgage is on average above 18 years according to the Housing Credit Observatory / CSA. But we all know it can happen in two decades! Temporary financial difficulties, dismissal, divorce, illness, accident. if you face this kind of situation, the suspension of your mortgage can be a salutary solution.
1. Maintain an adapted standard of living
Deferring your mortgage allows you to avoid a payment incident and to ease your debt level. The process is simple: you announce the nature of your difficulties to your bank or to the credit company and you negotiate a postponement of deadlines. As a result, your mortgage is suspended for several months . You no longer have to repay the installments over the given period. You resume payments when your personal or professional situation clears up.
2. Check the clauses of the mortgage
Be careful, not all mortgages are affected by this flexibility. You can defer the maturities if you have a fixed rate mortgage, a variable rate mortgage and a mixed rate mortgage. Some flexible credit offers also offer this possibility. This is an excellent reason to thoroughly educate yourself before choosing your home loan. Depending on the lending institution and the loan contracted, the extension may be regulated. For example, on the total duration of your loan, you have the right to suspend your repayments 3 times with a delay of 12 months between these 3 authorized suspensions.
3. Calculate the price of the credit suspension
Two types of real estate carryforwards are proposed: the partial deferral and the total deferral. With the first, you repay the interest but you no longer pay the capital. It is therefore more advantageous to play the postponement at the end of the loan, when the interest is lower. Regardless of the type of maturity deferral, your banker must establish an amendment to your loan agreement and provide you with a new amortization schedule. The extension of the deadline does not generate any fees. On the other hand, you must be aware that the loan insurance premium must be paid even during the suspension so a carry forward always generates additional costs.