The coronavirus has caused unparalleled financial issues for companies and individuals alike. The pandemic has forced people to isolate themselves from even those that they are closest to, which means that many people are not able to work. While some individuals have been able to work from home or figure out how to remain isolated in their workplace, millions of others have either lost their jobs or have been furloughed.
The millions of people who have lost their livelihood by no fault of their own can find themselves unable to afford even basic necessities. The largest monthly payment most people have is their mortgage payment. This vast increase in unemployment and lost wages has also caused both federal and state governments to respond. With things like the CARES Act and the coronavirus stimulus payments, the government is trying to help mitigate the economic environment caused by the virus. Here are some options that you may have if you are struggling to pay your mortgage.
If you can pay your mortgage – Pay your mortgage.
The most important thing to understand about your mortgage payment during this pandemic is that if you can pay your mortgage, then you should. While this is not a program offered by the government, it is important that continuing to pay your mortgage will help you in the long run.
If you can’t, or can only pay a partial amount contact your mortgage servicer.
It’s important to let your mortgage servicer know your situation as soon as possible. They may be able to offer deferred payments or any other relief program they may have available.
CARES Act relief options for federally backed mortgages.
If your mortgage is backed by the federal government, and 62% of first mortgages are, you immediately qualify for either mortgage forbearance or a halt on any foreclosure proceedings associated with your home. These two options are explained below, but even if your mortgage is not federally backed, there is a good chance you qualify for some type of relief. It is vital that you contact your mortgage provider. In addition, there is a list of state-backed relief options found at the bottom of this Forbes article.
- Mortgage Forbearance
Mortgage forbearance is not mortgage forgiveness. If you take up your lender on the forbearance of your mortgage, the entire amount of the payments that you miss will be due when the forbearance is over. However, for short term issues and if your job will be reinstated, this is a great option.
- Moratoriums on foreclosures
If your home is in the midst of foreclosure proceedings, you should contact your lender. This moratorium on foreclosures could help you find the time you need to get your loan up-to-date and to maintain ownership of your home.