If you’re one of the thousands of Americans who have been financially impacted by COVID-19, you might be looking for ways to reduce the blow on your mortgage payments. Fortunately, there are a variety of coronavirus mortgage relief options for homeowners.
Are you eligible for coronavirus mortgage relief? This could depend on a variety of factors, including your income and current financial situation.
Your options also depend largely on the owner of the loan, not the financing terms in your repayment plan. Take a look at some of the most basic forms of financial assistance available for renters and mortgage borrowers.
Foreclosure and Eviction Freeze
Because of the widespread economic havoc caused by the novel coronavirus, federal and state legislators have instituted some changes to eviction and mortgage policies to protect consumers.
States have determined various ways of handling eviction requests, late mortgage payments, and payment deferrals. As of July 2020, 21 states have issued moratoriums on foreclosures and evictions.
But, those payments will eventually be reinstated and owed at the end of the deferral term. So, it’s in everyone’s best interest to stay on top of your mortgage or rental payments to the best of your financial abilities.
Income-Based Repayment Plan
If your job has been disrupted as a result of the coronavirus, you may be able to adjust your monthly payment using an income-based repayment structure.
Like many other loan modifications, your eligibility for this relief option depends on your creditor and the terms in your lending agreement. To find out if you’re able to reduce your mortgage payment, call your lender and describe your current financial situation.
Include the amount of income lost as a result of:
- Job loss
- Pay cuts
- Sickness
- Caring for a family member who is sick with COVID-19
Contact your loan servicer as soon as possible to see if you can lower your mortgage payment.
CARES Act: Federal Foreclosure Relief
If you’re falling behind on mortgage payments as a result of loss of income/employment or sickness caused by COVID-19, you could be eligible for the federal CARES Act.
The CARES Act was enacted to protect homeowners and renters from financial hardships caused by coronavirus. For those who are caring for a sick family member, or who have become sick themselves, can.
If you have a federally/GSE-backed loan and you are going through financial hardship because of the pandemic, you’re entitled to loan forbearance.
You are entitled to mortgage forbearance if you have a federally or GSE-backed mortgage and you are experiencing financial hardship due, directly or indirectly, to the coronavirus national emergency. When requesting mortgage relief, be prepared with the following information and questions you want to ask.
Is Your Mortgage Covered By the CARES Act?
To find out if you’re entitled to mortgage relief through the federal CARES Act, you need to call your loan servicer and explain that you’re going through a financial emergency as a result of the coronavirus pandemic.
Be sure to have your account information handy, and ask the representative the following questions:
- What criteria will be used to determine forbearance eligibility?
- What are the loan modification options?
- What payment options are available at the end of the forbearance period?
- What are the requirements for non-federally backed loans?
Whatever terms are established between you and your creditor should always be recorded in writing. This gives the borrower security and ensures that all expectations and times are met.
What is Mortgage Forbearance?
Those who have been laid off or experienced income reduction during the pandemic can typically suspend their mortgage payments for up to a year with a forbearance plan.
For short-relief, you can also be granted a temporary payment reduction. This can be incredibly helpful for homeowners or renters who are between jobs, facing eviction, or experiencing any other unexpected hardship.
Mortgage forbearance is a temporary solution that doesn’t typically involve reducing the amount owed on the balance of your loan. But, it is a great quick solution for anyone who expects to be able to resume regular payments within 12 months.
Get Help With Basic Housing Expenses
Did you know that you can also get disaster financial assistance? This service helps homeowners with their bills and food costs, in addition to housing fees.
U.S. taxpayers are on track to receive a second stimulus check, which can be used to take care of everything from childcare costs to housing expenses to medical bills.
Even if you’ve received (or will be receiving) a stimulus check, you may still be entitled to additional assistance. Some auxiliary options available on the local, state, and federal level include:
- Additional funding for new/existing SNAP recipients
- Meal pickup for students and qualifying children
- Remote benefit enrollment
- Additional assistance for vulnerable communities, including seniors, immunocompromised individuals, and pregnant women.
Rental Payment Assistance
Although the four-month moratorium placed on rental evictions is coming to an end, there are still a variety of resources available for renters who have been affected negatively by the COVID-19 pandemic.
If you’re currently renting your living space and you meet certain requirements, you could receive a significant amount in housing benefits.
Reach out to local and state-level government organizations to see if your area is covered by an ongoing assistance or subsidy program. Terms vary greatly depending on where you live, so be sure to get all of the eligibility terms in writing to streamline the application process.
Many Americans are struggling to stay afloat when it comes to basic living expenses, and housing is often the largest bill on the table. Use this list as a resource to obtain the best coronavirus mortgage relief option for your financial situation.
Take a look at these other helpful homeowner resources to maximize your savings as a homeowner during the current pandemic.
