Protect Yourself from Losing Your Home
Are you Currently Struggling To Make Your Monthly Mortgage Payment Due to Covid-19?
I’m sure we can all agree, the impact of Covid-19 was fast. It was completely unexpected and has left many people in financial emergency. If you are one of the many homeowners in the United States who is currently in forbearance or if you are struggling to meet your mortgage payments, I want to help you find a solution NOW.
The worst thing you could do is wait until you fall behind, and acting swiftly may help you keep your home and the money you have invested in – which is of course what we want!
Step 1. Talk to your Loan Service Provider about a few options.
THIS IS EXTREMELY important in order to be able to find out what is available to you.
Option 1. Forbearance
You are potentially already in Forbearance. It is when your lender lets you make partial or even skip payments. An important note is that YOU WILL have to repay any missed or reduced payments in the future, it doesn’t magically erase what you owe, but at least it will help for now.
Some loans like the ones with Freddie and Fannie Mae are now doing up to 12 months of forbearance and potentially allowing up to the end of your loan term to make up all of your payments! This can be helpful in getting you back on your feet.
Your loan may be with someone other than Fannie Mae or Freddie Mac, but still backed by Fannie or Freddie, without you even knowing about it — so your best best it to search in the links provided below.
To see If your loan is with Freddie Mac
To see if your loan is with Fannie Mae
Option 2. Reinstatement
Reinstatement is when you make a payment that covers ALL your late payments at the end of your moratorium period – which is the period of time when you are allowed forgiveness.
I recognize that this can be a bit difficult to do, especially if you are not generating income. So to make sure that this is not what you get put on by default, call your lender to discuss your options!
Option 3. Repayment Plan
This can help you start paying back a little more each month until you are all caught up.
Option 4. Alter Your Current Loan
The Final option to discuss with your lender is whether or not you can alter your current loan situation a little bit. Suggest adding a few years to your loan. So that way you show that you’re committed to paying it back, you just need a little bit more time to make up for this rough patch.
Adjustment option 1. Lower Your interest Rate
As I’ve said before, a low interest rate can REALLY help with your monthly payment.
Adjustment option 2. Forgive part of the Load
Adjustment option 3. Fix an Adjustable Rate Mortgage
This step only pertains to you if your current loan is an adjustable rate. If it is, perhaps they could fix it in order to help you feel more stable with your payments, knowing they won’t spike all of a sudden.
I DO NOT SUGGEST moving from a fixed rate mortgage to an adjustable rate mortgage at this time!!
Adjustment option 4. Take the Big Payments like Insurance and Taxes
and have them broken up into your monthly payment. That way you can stay on schedule with it as opposed to having to come up with the cash quickly.
Remember When you Work With a Lender
you are a team. When that lender gives you a loan, they are trusting you to repay it.
If you don’t, not only do they look bad, but they are left responsible for the loan. And if they can’t pay off your loan — no more money to lend — it’s a scary cycle.
While you are having this conversation know that everyone wants you to stay in your home and to pay off your mortgage.
Please fill out the form to download a guide to help you consider all of your options and find out what is best for you.
Please note that in all of these situations, you do have to pay back the loan.
It is extremely important that you pay what you can and that you take the help when you need it. Work with your lender to find the best way to do this.
If your lender is not willing to Speak with you,
then your next best bet may be to refinance.
Refinancing can be done with your current lender, by using all of the steps above, or it can be done with a new service provider. If done with a new provider, you would be taking the new loan and paying off your old mortgage with it and then assuming the new loan terms with the new provider.
** Please note: Currently, You cannot Refinance, let alone take out a loan and then claim forbearance on it. The Mortgage Lender will not be able to provide you with the loan and the entire process will end immediately.
Right now, we are still having record-low interest rates so there’s a silver lining in that.
But as I have mentioned before – it is super important to work with a trustworthy lender.
Send me a message by filling out the form and I’ll send you my preferred lenders list, shortly.
There are some things you should be aware of when speaking to new lenders.
If it sounds too good to be true, it probably is.
Words like “Guaranteed Approval” or “no Income Verification” are huge red flags.
Lending standards have tightened as of March and May, so if someone is telling you they can give you a loan regardless of your employment status, credit history or assets, your best bet is to probably run.
Typically, No loan should be guaranteed approval, especially right now and is a huge red flag for consumers!
Watch out for Hidden Large Future Costs
If you are signing a High-risk adjustable rate mortgage there may be a “teaser rate” period.
High Risk Adjustable Rate Loans are rarely the right loan for families who already are having trouble repaying and if you are signing an adjustable rate mortgage it’s important to be aware of what your Cap Rate is and make sure it is a number that you would be comfortable making monthly payments at if it were to spike.
If a lender tells you – this is your only option – speak with second lender before you decide.
Check your barriers for Refinancing in the future.
They can really make your life difficult down the road. So be aware of your prepayment penalties and what that will look like if you ever want to refinance again.
Be careful with No down payment ads
If you are being offered a loan like this, be wary that it may actually be one loan split into two mortgages with one having a much higher cost.
So be clear on that cost so that you can be sure you will be able to afford the payments before you sign.
Do the consultation via zoom or some other device that you can see the lender you are speaking with so you can get a better judge of their character. Watch out for any strange behavior or anything like Unethical Document Management.
NEVER SIGN A BLANK DOCUMENT or even a document that has been pre-dated!
And remember to always read EVERY THING – even the small print!
For a downloadable PDF of these and even more tips and tricks for talking to new lenders, fill out the form.
don’t get taken advantage by all cash/any condition scams
You know them when you see them. They’re usually written on a piece of poster board with a sharpie marker. This, here should also be a warning that These may be scams.
They bait you with the promise of rescue from foreclosure but more often than not, leave you with barely enough money to bail yourself out.
With the amount of serious buyers out there and the shortage of housing inventory on the market, if you are thinking of selling, you’re best bet is to speak with a Realtor to determine whether or not listing your home is the best option.
Counseling resources available to borrowers like you.
There are some wonderfully generous, non-profit organizations specifically dedicated to helping you avoid foreclosure and they can be invaluable.
The best place to start is the list provided by Housing and Urban Development, categorized by state, You can also reach them by phone.
One final warning is to watch out for companies that offer assistance by hiring a lawyer to defend foreclosure in court or negotiate lender assistance on your behalf.
If you come across this, or before signing any documents, you should contact one of the counseling organizations from the HUD approved list before you pay or sign ANYTHING.
Sources: Are you having problems Paying Your Mortgage? National Association of Realtors, NeighborWorks America, Center for Responsible Lending, Forbes: Fannie, Freddie Announce Mortgage Deferral Program For Homeowners Impacted By COVID-19
Each office is Independently Owned and Operated. I am not a mortgage specialist, lawyer, or a financial advisor. I am not guaranteeing that you will be able to receive any financing, or financial aid of any kind. i am also not ensuring your safety from scams and i am not guaranteeing you will avoid foreclosure in the future. There may be more questions and precautions to take and due diligence is to be done by you, the homeowner. These are merely educational Materials and suggestions to help you guide the conversation and know more about what your options are. all data and information taken from other sources are subject to change and have not been verified and cross checked. they are all reliable sources and assumed to be true all other opinions are my own conclusions taken based on this data. .
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