Corona Virus and Your Credit
COVID-19
Needless to say, the first thing on your mind is you and your family’s health. We are lucky to be living in the age of digital communication. There have been times in the past when millions of human lives and entire cities were wiped-off because of a virus. There were no ways of warning even the next village. We will conquer this virus within the next six months. But, the Coronavirus will have side-effects and you have to plan for those side-effects now. A stitch in times saves nine.
Side Effects
Here I am going to talk only about one of the side-effects of this Virus. But before I talk about that, I just heard about a case where a buyer who had bought a house and got his mortgage approved. But when the bank called his employer to verify his employment, the bank found out that the buyer just got laid-off because of the Coronavirus pandemic. The bank had no choice but to decline the mortgage. There is very little chance that the buyer will get his deposit back.
Buying a Home? Talk to Your Employer First.
So, if you are thinking about buying a house, it will be a good idea to talk to your employer first before you put down a deposit. Your employer may not be in a position to assure you, as not even them know what will happen tomorrow. However, discussing with your employer first is a very good idea.
Long Term Problems
The long term effect I want to talk about here is its effect on your credit. I am thinking for all those who may not realize how the Coronavirus can negatively affect one’s credit. This Coronavirus will have disastrous after-effects for many. It can, and most likely will, lead to a recession. The Stocks have already tumbled big time. Some small businesses may not be able to survive. But most importantly, people who live from pay-cheque to pay-cheque may get affected adversely and may not be able to recover for quite some time.
Payment Obligations
Please don’t ignore your payment obligation. Don’t think that the lenders, especially credit card companies will understand. They will not. Multi-billion dollar financial corporations do not understand the common man’s pain. If you think you are going to miss a payment, call your credit card company right away and follow it up with an email and tell them to send you an email confirming the agreement you reached with them.
High Interest Rates
If your credit score goes down or your credit gets ruined, you will be paying high-interest rates for the next seven years and may not be able to get a bank loan at all. No one will be interested in listening to stories. So, plan now.
Debt Consolidation
If you owe a lot in consumer debt, think about debt-consolidation now. If you are a homeowner, you can get a private second mortgage in Surrey without income verification at a very low rate right now as the rates have come down a lot. You can not only pay-off your 22% high-interest rate credit cards, lower your interest rate, make just one monthly payment instead of ten payments but also free up your credit cards for emergencies.
Crown Funding
If you are a homeowner, feel free to call me or call your private mortgage broker for advice and help. Because of the dire circumstances, I will do my part in helping everyone I can. I can assist you with all your mortgage needs and especially if you need a private first, second or even a third mortgage.
Good credit is power. Even during these uncertain times, protect your credit fiercely.
Jeet Singh
This article, and all it’s advice, was written by Jeet Singh, he is a mortgage broker and credit professional at Crown Funding in Surrey. He knows a lot about credit, and he loves to combine his passion for writing with his knowledge of credit and mortgages. He can be reached at 778-320-9494 or info@crownfunding.ca.
