With Covid19 wreaking havoc on the economy and people being out of work, you may wonder how to prevent mortgage paying trouble. In today’s blog, we’ll discuss some ways to help avoid these issues, so if you’re ever faced with this or other situations, you won’t lose your home.
What You Should Know
There are some key things you should know to ensure you can meet your mortgage obligations monthly,
Know Your Mortgage Details
Ask yourself these questions: Do you know what kind of mortgage you have? And do you know whether your payments will increase? Knowing these details will help you determine your next steps. For example, if you have an ARM (Adjustable Rate Mortgage), your payments will likely increase. If you’re going to have problems paying the increase, find out if you can refinance to a fixed-rate loan instead. You may have to pay penalties for doing so, so check your contract first. If you’re planning on selling soon after your adjustment, you might not want to refinance.
If You’re Behind on Payments
If things out of your control are preventing you from making your monthly mortgage payment, contact your loan officer to discuss your options — the sooner, the better. Regarding Covid19, loan officers are expanding the options, so homeowners aren’t stressed about paying their mortgage during the pandemic. Right now, officers are getting plagued with calls, so be patient but persistent in your quest.
Avoiding Default and Foreclosure
If you are behind on your mortgage payments, talk to your loan officer about preventing foreclosure with the following options:
Reinstatement: You come to an agreement on a date when you can pay the entire past-due amount, plus any penalties and late fees. This is an appropriate option when the situation is temporary, as with Covid19 issues.
Repayment plan: With this option, your loan officer offers you a fixed amount of time to repay the owed amount by including it in your regular payments. This works when you’ve only missed a few payments.
Forbearance: Your payments are temporarily suspended for a period that you and your loan officer agree to, knowing that after, you resume making your regular monthly payments. This option includes a lump-sum payment for however many months to pay back the amount to bring you current on your loan.
Loan modification: You and your officer agree to a permanent change to one or more of the terms of the mortgage contract. This would help make payments more manageable. Some modifications may include reducing the interest rate, extending loan terms, or adding missed payments to balance of the loan.
Selling your home: If you can, selling your home enables you funds to pay off the loan.
Bankruptcy: This is the last resort since the consequences can have a lasting impact. A bankruptcy stays on your credit report for ten years and can make it challenging to get credit, buy another home, get life insurance, and maybe even get a job.
Need to Sell Quickly?
If you opt for selling your home, let us buy it for you. We offer a fast transaction, close soon, and get your money more rapidly than you could otherwise. We buy homes in Oklahoma County and Tulsa, Oklahoma. Contact us today for more information.