Millions of Americans have been impacted by the COVID-19 pandemic. If you happen to be one of them, it’s likely you’re concerned about how to pay your rent or mortgage. The good news is: lenders and legislatures are working to provide you with relief. If your bank account has run low, there are options to discuss with your lender to lessen your worry and protect your wallet.

Delay Payments—Don’t Just Stop Making Them

If you are one of many homeowners worried that after this month’s mortgage payment, you might not be able to make another, know that many are in your shoes. But whatever you do, don’t just stop paying. Call your lender and ask them about loan relief options to help you temporarily reduce or suspend payments. It may take a while to get through, so please be patient—lenders are experiencing high call volumes, and individuals at these companies are likely dealing with personal issues and financial concerns as well. 

Once you do get through, some of the options a lender might discuss with you are a mortgage forbearance and a loan modification. Forbearances might allow you to suspend payments until you’re back on your feet, though interest will likely continue to accrue. On the other hand, loan modification could help you adjust the length of your loan or decrease your monthly premium, so you have more free cash for household essentials. Some lenders also offer to waive late fees.

After you’ve decided on a relief option, be sure to double-check the terms. For example, will you need to make a large, lump-sum payment once your forbearance ends? What kind of details about income, expenses, and assets will you need to provide to extend a forbearance if you’re still not ready to pay? Are you even able to extend it? Regardless of what option you choose, be sure to also ask your servicer to provide written documentation of the new terms and be aware that forbearance can impact your credit score in some cases. Pay attention to statements and monitor your credit score/report to ensure everything is going as planned. 

As states begin to reopen their economies, some eviction protections and relief options offered a few weeks ago might no longer apply. That’s why contacting your lender, who will be up to date on industry developments and relief programs, is critical. The Federal Housing Finance Agency (FHFA) could also be a great resource if your loans are owned by Fannie Mae, Freddie Mac, or the Federal Home Loan banks.

Lastly, if you think your current lender isn’t being sympathetic to your situation, changing your lender is a viable option. With historically low interest rates available, refinancing your mortgage or looking into a home equity loan might be a better alternative. We at Open Mortgage are here to discuss all your home financing options. Browsing our website today is a great way to learn about our services and start talking with home-financing professionals about relief.