Your Guide to Understanding Mortgage Relief Options
When it comes to mortgage relief, it is important to know the different mortgage relief options in order to pursue the route that is best for you!
This is the plan everyone is talking about since the passage of the CARES Act. 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.
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.
This is a plan that allows you to postpone your payments for a set time then pay them at the end of your regular loan term. “Deferments” and “forbearances” 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.
Payment Assistance Program
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.
Cash Out Refi or Home Equity Line of Credit (HELOC)
If you still have enough income to qualify, accessing 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.
Want to discuss these options more in depth with a mortgage expert? Contact one of our loan officers today!
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