COVID-19 mortgage modification programs were, and still are, a valuable lifeline for individuals who found their income disrupted by the COVID pandemic. The modification program allowed many homeowners to put their loans into forbearance. A loan forbearance permits you to temporarily stop making or reduce the amount of your mortgage payments. If your COVID mortgage medication is ending soon, here are a few things you should know.
1. Your Options for Catching Up on Your Mortgage Depend on Your Lender
Each lender has its own way of assisting borrowers who have used mortgage modification options. Most options strive to help the borrower make up their missed payments.
One alternative is to put the missed mortgage payments at the end of the mortgage. These payments are still part of your total loan balance, and you're still obligated to pay them. Your lender essentially extends the term of your mortgage to account for the missed payments.
Another option is to add the missed payments to your current mortgage payments. For example, if your COVID mortgage modification permitted you to stop making payments for six months and each payment is $1,000, you would owe $6,000. If your lender gives you 24 months to catch up on your missed payments, this means you will need to increase your mortgage payment by $250 each month.
2. The Type of Mortgage You Have Impacts Your Modification Options
Your alternatives for ending your COVID mortgage modification depend on who owns your mortgage. FHA mortgages have a program that allows you to take the amount of your missed payments and put them as a lien on your home. The lien isn't due until you sell your home or refinance or pay off your mortgage.
When your COVID mortgage modification is about to end, your lender is required to contact you and explain your options for getting your mortgage payments up-to-date.
3. A Permanent Modification Can Assist You with Repaying Your Mortgage
There are several programs available to help homeowners utilizing COVID mortgage modification options, but you have to apply for them. These programs permit you to permanently modify your loan so that your monthly payment is permanently lowered. You'll likely have the ability to extend your loan term, which helps lower your monthly payments and decreases your interest rate.
Many individuals are still struggling due to a reduced income, and it's possible that these income changes will be long-term.
Permanent loan modifications strive to adjust your mortgage payment so that it's more affordable for your income. Talk to a local COVID mortgage modification service, such as Save My Loan, LLC., near you to learn more.
Share30 September 2021
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