During a time in which some people have been furloughed or have lost their jobs altogether, the reality of your house being foreclosed upon is pretty scary.
It’s unclear how long our economy could be reeling from the coronavirus pandemic, so the best thing you can do right now, concerning your home and mortgage, is to educate yourself.
Here are some options available to you.
Get ahead of a foreclosure.
Because foreclosures are handled differently in each state, you’ll want to learn about yours specifically.
As soon as you realize you might have trouble making your mortgage payments, you’ll want to get in touch with your lender. Once they know about your financial difficulties, they can work with you to create a plan, USA.gov says, but DO NOT stop paying your bills. You do not want to wait until you can’t pay your bills to contact your lender. The longer you wait to call, the fewer options you will have.
If foreclosure is something you fear you might face, the following are options you may have available to you.
Mortgage forbearance
According to USA.gov, federally backed home loans can get six months of mortgage help, and Federal Housing Administration reverse mortgages are eligible, as well.
Not sure if your mortgage is federally backed? Click or tap here to view a list of federal agencies that provide or insure mortgages.
If the coronavirus pandemic has impacted you in a way that has left you with problems making payments, your loan servicer can do one of two things:
- Defer or reduce your payments for six months if you contact them to make arrangements.
- Give you another six months of mortgage relief at your request.
Loan modification
You and your loan servicer can agree to permanently change some terms of the mortgage contract to make the payments more manageable. These modifications might include:
- Reducing the interest rate.
- Extending the term of the loan.
- Adding missed payments to the loan balance.
Another modification might include reducing the amount of money you owe on your mortgage by forgiving or cancelling a portion of the debt.
If loan modification or forbearance is something you’re interested in, make sure you can show you are making a good-faith effort to pay your mortgage. The Federal Trade Commission says if you can show you’ve tried to lower bills elsewhere, your loan officer may be more likely to negotiate with you.
Making Home Affordable Program
Get help through the Making Home Affordable (MHA) program, which will provide you free counseling when it comes to advice and assistance in keeping you in your home or safely getting you out.
Click here to find foreclosure avoidance counseling in your area.
Sell your home.
This may not be your ideal solution, but this could be the best way to provide the funds you need to pay off your current mortgage debt in full.
There are many options available to you, but the bottom line is: Contact your lender, and do not wait until it’s too late. They will be able to take a good look at your loan and investigate what the best option might be for you should you find yourself in trouble paying your mortgage.
Click here to learn more about avoiding foreclosure.