Top 5 Things Your Bank Won’t Tell You If You’re Having Trouble Paying Your Mortgage
With unemployment at near-record levels, many Americans are struggling to keep up with their mortgage payments. What many may not know, however, is that homeowners have options when it comes to keeping their home even during tough times.
Banks and lenders may not be as forthcoming as they should be when it comes to helping their customers understand the solutions that are available to homeowners going through tough financial times.
If you need short-term help covering your mortgage payments while the country recovers from the financial crisis caused by the corona virus, arm yourself with this information, and then call your lender and ask for help.
Protections for Federal Loans
If you have a federally backed loan such as FHA or VA, Congress passed a law that offers help. The law states that lending institutions are forbidden from foreclosing on your loan for 60 days after March 18, 2020. The law also holds that consumers have a right to request forbearance for up to 180 days, and may request an additional 180 days of forbearance after the initial period.
Forbearance for All
Even if you have a conventional loan, you can ask your bank for forbearance. This is where lenders either reduce payment due amounts or pause payment collections altogether for a limited period of time, to allow the homeowner to get back on their feet.
You might be able to lower your monthly payments through a loan modification program, of which there are several types. These can be tricky, so be sure to work with a mortgage broker you trust to help you get the best deal while having the lowest impact on your credit rating.
This is a good option if your loan is financed at a high interest rate. Rates are quite low right now, and you can probably reduce your monthly payment by refinancing at a lower interest rate. You’ll have to pay closing costs, but you can probably roll those into the loan and still come out ahead.
If you have fallen behind on your payments, your bank may be willing to work with you to develop a repayment plan to help you catch up. This may take the form of monthly payments or a lump payment.
The bottom line is that you have options. If you suddenly find yourself in financial dire straits, don’t despair. Lenders will often work with you to develop a plan that makes sense for your particular situation. But you’ll likely have to be proactive and reach out to get the ball rolling.
Times are tough, but so are you!