As the COVID-19 pandemic embarks on households, one of the biggest concerns they are facing are mortgage payments and seeking mortgage relief. In California, the Governor’s office has requested that mortgage lenders, including big-named lenders, offer extended grace periods for mortgages for those who have been negatively impacted. If you have looked into mortgage help and found solace in temporary forbearance for now. Once that forbearance period is over, however, your mortgage will come due and in most cases, missed mortgages will be due. Below are options for help with mortgage relief in California.
Mortgage Assistance Programs
Currently, mortgage lenders are offering a number of assistance programs through a temporary forbearance or grace period that includes several months of payments. The benefit of enrolling in these assistance programs is that your credit is not negatively impacted and you are not seeking immediate forclosure. However, it is important to understand that these assistance programs will end and any payments not made during this time will be due immediately.
Pay Something If You Can
Once you hear the words that you do not owe anything until months in the future, do not forget about your payments. While the pandemic has impacted you financially, make all attempts to pay something towards your mortgage. Even if you cannot make a whole payment, your mortgage lender will be willing to take partial payments and this will lower your balance once the forbearance period ends, making it easier to catch up and return to a current status with your lender.
A good way to maintain small payments is to take advantage of bi-weekly payments to your lender and apply towards your mortgage. This is great for those who may still be working essentially or receiving unemployment benefits while out of work.
Reducing Unnecessary Monthly Costs
During this time of instability and uncertainty, consider reducing monthly costs that you do not need and are not benefiting from. With places such as gyms and arcades and other areas closed during this time, take any funds that are refunded for these memberships and apply towards your mortgage. If you are not granted a refund, then consider pausing your membership until a later time so that you can take care of your home first.
Embrace Government Aid Options
Obtaining mortgage help is available at both the state and federal level. With the government sending a stimulus package in April to Americans, many experienced $1200 per person and $500 per dependent based on their income level. Taking advantage of this additional funding is a great way to cover your mortgage when your regular income has decreased. For those who are able to do so, use as much of the aid for mortgage relief as possible.
For those who are not receiving an income, unemployment is available and has been boosted an additional $600 a week for recipients. Taking at least one of these checks a month and applying to your mortgage during the forbearance will significantly reduce the balance due at the end of the grace period.
Refinancing Is Always A Great Option
One of the best options to consider during this time is refinancing your mortgage. During a refinance, your mortgage is evaluated and can be reduced for a lower interest rate. Because of the lower interest rate, you are eligible for lower monthly payments or a lower term in loan. Above all of these benefits are the fact that your mortgage will reset to current, and you will not have a balance of multiple payments coming due at once in the near future. Considering the current circumstances around the pandemic, there is no better time than to see how you may qualify. Even before this pandemic, refinancing has been a type of mortgage relief for California residents for years.
Before you can refinance your mortgage, you must meet current qualifications, including verifying income for stability purposes. If refinancing is not currently an option because you or your spouse may be out of work due to the pandemic, table this option until the stay-at-home order for California has lifted and you have returned to work with a steady income. At that time, you have the opportunity to potentially shift your mortgage from being in forbearance to current with refinancing. This option is always available for borrowers, so just because you may not presently meet qualifications does not mean that you will not once your income resumes. Consider one of the above options for the time being and then move to a refinance status upon stable circumstances.
Deferring When Available
Some mortgage lenders have been considering payment deferment as an option. Beginning in July, large lenders such as Fannie Mae and Freddie Mac will be offering borrowers up to 12 months of payment deferments for their mortgages, moving the balance owed during this time period to the end of the loan. At the end of the loan, you will be required to pay the deferred balance in a single lump sum or spread this balance out through a future refinance option. This immediate relief is significant for California residents who are suffering financially and unable to maintain mortgage payments at this time. Your account will stay current with the deferment option, protecting your family from foreclosure and maintaining your credit at the same time. With these mortgage leaders offering a variety of options to protect their borrowers, others are soon to follow. Reach out to your lender for any possible deferment options available if this option sounds like it would work for you.
Get Ahead of Your Mortgage Today
Maintaining a home for your family is essential now more than ever. If you are experiencing financial hardships, then it is time to reach out to your lender for any mortgage assistance programs they may be offering their borrowers. The need for financial assistance for California borrowers is as critical now as it has ever been. Once you have enrolled in a program that fits your needs, take every opportunity to continue paying as much as you can towards your mortgage to prevent future financial hardships.