If you’re wondering how you’re going to pay your mortgage due to the spread of coronavirus, you’re not alone. Luckily, there are some things you can do to help take care of that monthly payment. Here are some options that might be available to you.
1. Talk to your loan officer before your payment is due
Once you realize that you’re going to be unable to make your mortgage payment, your first call should be to your loan officer. Essentially, your loan officer will be able to tell you about all the options that are available to you, based on the specifics of your financial situation. Ideally, this phone call will happen well before your payment is due. The more time you give yourself before you have to make a payment, the more time you have to come up with a solution.
2. Ask about loan deferment
Fannie Mae and Freddie Mac — the two government-sponsored enterprises that buy most of the country’s mortgage debt — recently announced a new payment deferral option. Originally intended to be rolled out later this year, the option has since been released early due to the spike in unemployment from coronavirus. The deferral option would allow homeowners to temporarily defer mortgage payments for two months by adding them onto the end of their mortgage. That means, while you’ll get a break from paying now, you’ll still have to make up those payments at the end of your loan term.
Note that you do have to be able to show a “decline in income” to be considered eligible for the program.
3. Ask for forbearance
Loan forbearance allows you to temporarily lower or pause your loan payments for a longer time, usually up to a year. Just like the loan deferral program, any paused payments will be added to the end of your loan term.
4. Work out a loan modification
A loan modification might be a better idea if you think your financial troubles could last for longer than a few months. With a loan modification, your lender permanently changes the terms of your loan to lower your payment. These changes could include reducing the principal amount owed, lowering the interest rate and extending the loan term. In this case, you’ll still be responsible for making mortgage payments, even though they are lower. So, you’ll want to be clear with your lender about how much you can afford to pay.