The COVID-19 Pandemic is creating unique challenges for us all. While we can get through it together, for many of us, shelter-in-place orders have led to mass layoffs and serious financial struggles. If that applies to you, there are ways to get help. Both the federal government and private lenders are providing mortgage relief programs to get you through this trying time.<\/p>\n\n\n\n
The pandemic has also created opportunities for refinancing your mortgage. If you\u2019re in a position to do so, now might be the perfect time. Here\u2019s how to get the help you need to get back on your feet and maybe even lower your interest rate in the process.<\/p>\n\n\n\n
5 Quick Steps to Take Now:<\/p>\n\n\n\n
Whether you\u2019re struggling right now or trying to plan long term, start with these five moves:<\/p>\n\n\n\n
If you\u2019re struggling to cover your monthly mortgage payment right now, you have options to get help. Both the federal government and private lenders are offering payment deferrals and other specialized plans for homeowners impacted by COVID-19.<\/p>\n\n\n\n
The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act has several provisions<\/a> related to mortgages. However, to qualify, your mortgage must be federally backed or held under:<\/p>\n\n\n\n If you’re not sure, ask your servicer if you qualify, or check online to see if Freddie Mac<\/a> or Fannie Mae<\/a> own your mortgage. If you qualify, you can request loan forbearance for up to 180-days. You can also ask for an additional 180-days of forbearance with a one-time extension.<\/p>\n\n\n\n Mortgage loan forbearance allows you to temporarily defer mortgage payments, or pay less, without incurring late payment fees or hurting your credit.<\/p>\n\n\n\n The CARES Act also imposed a moratorium on foreclosures until May 17, 2020 for qualified loans. Until then, lenders and loan services can\u2019t begin a judicial or nonjudicial foreclosure, and they can\u2019t finalize foreclosure sales.<\/p>\n\n\n\n If your mortgage doesn\u2019t qualify for forbearance under the CARES Act, your loan servicer may still offer hardship options, including mortgage loan modifications<\/a> or loan forbearance.<\/p>\n\n\n\n For example, the Wells Fargo mortgage relief program<\/a> allows you to suspend mortgage and home equity payments for three months (and up to six months with an extension). JPMorgan Chase is offering a similar 90-day forbearance.<\/p>\n\n\n\n You can ask your loan servicer about the relief options it\u2019s offering. There are also roundups of mortgage servicers\u2019 options online, such as these from the American Bankers Association<\/a> and NerdWallet<\/a>.<\/p>\n\n\n\n Some states<\/a> are also offering mortgage relief programs, including suspension of mortgage payments, foreclosures, and evictions. Contact your local housing authority for details and the steps needed to apply.<\/p>\n\n\n\n Opting to defer mortgage payments could free up cash now, but there\u2019s potentially a big risk later.<\/p>\n\n\n\n Some servicers may ask you to make a lump-sum payment for all your missed payments once the loan forbearance period ends\u2014which might not be possible for many borrowers. If you can, try to negotiate a better alternative with your servicer, such as adding the missed payments to the end of your loan term. Or, spreading out the amount with a payment plan.<\/p>\n\n\n\n If you make property tax and insurance payments into an escrow account with your mortgage payment, your servicers may cover the amount and ask you to repay it over time. If not, you\u2019ll have to figure out how to make those payments or reach out to your creditors to ask about options.<\/p>\n\n\n\n For some, the coronavirus pandemic and resulting changes in the economy may present an opportunity. For example, the Fed rate cut<\/a> in March could push down mortgage interest rates, making buying a home<\/a> more attractive.<\/p>\n\n\n\n Whether or not home prices drop continues to be a mystery, though. While a recession might lead to drops in some areas, the pandemic also impacts homebuilders\u2019 supply chain and workforce. As a result, a lack of buyers might be matched by a lack of homes, leading home prices to remain largely unchanged.<\/p>\n\n\n\n However, for current homeowners, the lower interest rates could present an opportunity to save money by refinancing.<\/p>\n\n\n\n\n
Options for Mortgages That Don\u2019t Qualify for CARES Act Protections<\/h3>\n\n\n\n
The Dangers of Mortgage Loan Forbearance<\/h3>\n\n\n\n
What the Federal Reserve Rate Cut Means for Mortgages<\/h2>\n\n\n\n
Refinancing Could Save You Money<\/h2>\n\n\n\n