What Options do you Have if you Can’t Make Your Mortgage During COVID-19?

COVID-19 has made millions of Americans feel the pain of smaller paychecks or no paycheck at all. While it’s certainly scary to be unable to make your mortgage payment, there are relief options out there for people just like you. Before you jump at any solution, though, make sure you know the implications of your choices.

Do your Best

The most important thing you can do is make your mortgage payment. If you are able to make it, even if it’s past the 1^st of the month but before it’s 30-days late, this is your best option. Yes, you’ll pay a late fee, but it’s better than the alternative. If you absolutely can’t make your payment, know your options.

Can you Refinance?

Consider refinancing your loan. If you’re still working, you may be able to qualify for a mortgage with a lower payment. With low interest rates right now, it’s a great time to refinance. Whether you get a lower rate or extend your term, the bottom line is that you’ll have a lower payment and give yourself a month with no mortgage payment since your first payment won’t be due until the following month. Of course, if you’re not working, this isn’t an option. In that case, you’ll need other options.

Call your Servicer

Before you do skip a payment, call your servicer. Don’t just ignore the fact that you can’t make your payment. You have to let your servicer know what’s going on. They may have options for you that you weren’t aware of and can help.

Ways Servicers May Help

Your loan servicer will likely have a variety of options. While you may have heard about forbearance options a lot in the news, try to use that as a last resort. In the end, you’re going to have to make up the payments anyway, so why put yourself even further behind? If you don’t have one mortgage payment today, who’s to say that you’ll have a lump sum of three payments to make up down the road when the forbearance period ends?

If you are unsure how to proceed, call me. I can help you figure out options. Even though most lenders are encouraging forbearance, its long-term effects are detrimental. Don’t consider it unless you absolutely have to and if you do, please know the terms of the agreement. Most lenders will require you to pay the full amount deferred at the end of the three months. That means coming up with three mortgage payments plus your current mortgage payment all at once. It’s not an ideal situation, but I’m here to help – call me today!