The coronavirus has rocked the US economy and left millions of people without jobs. For many, they’re not sure whether they can afford their next mortgage payment. Foreclosure is a very prevalent worry among homeowners.
There are options for mortgage relief available. But if you want help, you have to ask.
Different lenders have different relief options. However, rather than extending the relief to all individuals, the lenders offer it to people who get in touch with them. You have to proactively call your lender and ask about your options.
The exact relief available to you will depend on your lender. With certain institutions, a borrower can defer their loan payment for anywhere from one to three months. This is a measure that lets you skip your home payments without incurring penalties, credit issues, or late fees.
This isn’t the same as mortgage forgiveness, though. Even though you don’t have to pay the money now, you will need to pay it eventually. Many lenders will offer flexible repayment plans that may involve paying extra in future months rather than paying the full deferment value all at once.
You are not entitled to relief just because you’ve been affected by the pandemic. You need to actually ask for it. If you don’t do this, your lending company can incur late penalties and bring in collection agencies. Foreclosures have been stalled in some places, but people may be anxious about potentially losing their homes in others.
Certain lenders only need to be told that you can’t pay. But others do require you to provide documentation showing that you’re experiencing economic hardship caused by COVID.
When you make the phone call to your lender, these are the questions you’ll need to ask:
- What options for relief do you offer? How long do they last?
- Does the interest continue calculating during a deferment period?
- Are any fees incurred during a deferment period?
- Will there be a negative impact on my credit score?
Many mortgage payments bundle the actual mortgage alongside insurance costs and tax payments. Even if you get a deferment for the main loan payment, you’ll still need to pay your property taxes and insurance costs.