Making Ends Meet: How to Handle House Payment Delays

The possibility that you can’t pay for the mortgage of your home is a scary thought. Because let’s face it, we can never tell what the future brings. You may be financially stable now, but we all know mortgage payments are usually up to 20 to 30 years. And anyway you see it, that’s a long time.

If you’re one of the people who are struggling to pay house loans every month, you are not alone. Reports show that over 8% of property owners who have their house on loan are at least thirty days behind in payments. Roughly, that’s about 4.3 million homeowners. Needless to say, these homeowners hustling to gather enough money so that they can pay up. Put to the mix the battered economy thanks to the virus, and you know it’s a nightmare for a lot of people.

The crisis has brought even greater numbers of people losing their homes. In fact, around 18 million people are losing their extra 600 dollars of benefits every week due to unemployment. And that means the housing loan’s delinquency rate has doubled putting up stats considered by experts as the highest delinquency rate in nine years.

Regardless of any reason you have, having this mortgage anxiety is only natural. And if you actually are currently dealing with this problem then here are some helpful tips on how to save your home and ride into the sunset despite the pandemic.

Request for a Temporary Postponement

Paying for a mortgage certainly is demanding. And in times like this where people are struggling to earn money, there are solutions on the table. So never lose hope.

Both Freddie Mac (Federal Home Loan Mortgage Corporation) and Fannie Mae (Federal National Mortgage Association) can help. Know that a mortgage forbearance has been released due to the COVID-19 pandemic. ; The government is providing this agreement on mortgage payments up until 12 months for people who are financially unstable. This means that homeowners can either suspend or reduce their payments in the meantime.

In addition to that, any mortgage delinquency will not affect your credit score because of the mortgage forbearance agreement. After 12 months of forbearance, lenders will then work on how to modify the borrower’s loans and make their monthly payments as low as possible.

talking to agent

Refinance Your Home Mortgage

If you feel like your current mortgage is expensive, especially when you bought a pre-owned house, then it’s time to trade your current mortgage for a new one. In simpler terms, it’s called refinancing your mortgage.

There are many benefits to refinancing a home. One of them is that you have cheaper monthly payments. Why? Because they have a lower interest rate compared to the old one. And you can also extend your new mortgage monthly payments for longer, up to 15-30 years.

The only downside is the additional interest in the distant future. To avoid this, making large payments is wise. This is to speed up the payments on the principal. Plus, mortgages don’t have any prepayment penalty. And yet, it’s always good to check.

Refinance to a Lower Mortgage Rate

As aforementioned, refinancing has a lower interest rate. And the best way to get it is through ARM (adjustable-rate mortgage). This is especially true if you are almost finished paying your current mortgage. More consumers and homeowners recognize the benefits of an adjustable mortgage when their timing is right.

An example of this is when a homeowner has a remaining $400,000 loan with a 4.25% rate for the next three years. To sum it up, usually, they’ll pay $1,976.76 every month, but with an adjustable mortgage rate, you are guaranteed to pay less. Because they only have a 2.875% fixed rate for five years. Meaning, your monthly payments will reduce, and you’ll only pay $1,695.57 every month.

Process for a Home Equity Loan

A home equity loan can provide immediate help to struggling property owners. It can help pay for large purchases, emergencies, and even for home renovations. But there’s a catch. You can only obtain this by going through a process similar to getting a mortgage. You can only acquire this loan if you have high equity in your home. This means that if the value of your house is more than what you owe, then this strategy can work for you.

A home equity loan is very effective, especially for borrowers that can pay higher than the debt every month. It takes a lot of self-discipline, though. Since the lowest payment is more likely the interest accumulated every month.

There certainly are ways you can put yourself in a better position when you’re having trouble paying up your monthly mortgage. So long as you get your act together, you should be closer to owning that property more than you realize.

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