This is a guest post by Tony Jones, Sales Manager & Senior Mortgage Specialist with Directors Mortgage. You can contact him at (509) 220-0259, or firstname.lastname@example.org. Please note, this information is accurate as of this article's posting time. The situation is very dynamic and is subject to change.
I hope you and your family are doing well during these times. Please be assured that Directors Mortgage has adapted to the the changes, and that my team and I are still here to help you.
Recently, several clients have asked about the news they are hearing - mortgage assistance may allow them to "skip" monthly payments if they are in a tough financial spot due to COVID-19. If you are wondering the same, in short, relief may be available. I strongly recommend you to consider all of your options, and you'll want to protect your credit and long term financial goals.
This is the main one the that the news media has been talking about with the CARES Act which pertains to Conventional, FHA, VA & USDA loan types. It is an agreement with your lender to reduce or delay regular payments for a set time. When the forbearance period ends, the postponed payments will be due all at once. It is important to know that you will not be able to refinance until you are at least one year out of forbearance.
This plan allow you to postpone your payments for a set time then pay them at the end of your regular loan term. "Deferment" and "forbearance" are often used interchangeably, but they are different. A deferment is more beneficial for many because it eliminates the need to make up multiple payments at the end of a short postponement period. Deferments are not available from all servicers.
This is an arrangement that allows you to make up your postponed payments at the end of a forbearance period by spreading the cost over a period of time. Payment Assistance Programs are not available from all servicers.
This is a legal process that alters the terms of your loan. For instance, a modification could lower your monthly payments by lengthening your loan term.
To set up the options listed above, please reach out using the contact information on your monthly loan statement. Document all calls and agreements, then check your monthly statements and credit reports to assure that the changes are reported correctly.
If you still have enough income to qualify, accessing the equity in your home by refinancing or obtaining a secured credit line may be a good option for lowering your payments, consolidating other debts, and/or creating a cash cushion. A refi will be especially beneficial if current rates are lower than those on your existing financing.
I hope this helps you understand the available options out there. If you have any questions, please reach out - I would be happy to help!