Homeowners across the country are struggling to pay their mortgage due to the current global crisis that continues to rage on. As a result, the reality of homelessness is becoming a more serious and present threat to everyone, particularly those whose income has been affected by illness, unemployment, or lockdowns. If you’re one of the many people experiencing financial hardship during these difficult times, here’s what you can do to help save your home from foreclosure.

Loan modification: With a loan modification, you and your loan provider will work together to adjust the terms of your mortgage to ensure that your payments can accommodate your financial situation. You can use a mortgage payment calculator to figure out what the best modifications would be for both you and your loan servicer. Among the few changes, you can make to your mortgage agreement include extending the term of the mortgage, lowering the interest rate, or reimbursing missed payments. In certain cases, your loan provider may even be able to bring down the total amount of debt you owe through loan forgiveness.

Forbearance: Under the Coronavirus Aid, Relief and Economic Security Act (CARES Act), you have a right to forbearance. Forbearance involves the temporary suspension or reduction of your mortgage payments. These reduced or missed payments will still need to be reimbursed after 180 days, either through partial payments or a lump sum payment. You can make small payments even under forbearance as a way to lower the total amount you owe in the future. 

Reinstatement: Reinstatement will put a pause on your mortgage as a way for you to catch-up on defaulted payments and any penalties and late fees that you’ve incurred as a result of those missed payments. You’ll need to bring your delinquent loan current in either one lump-sum payment or several small payments before the reinstatement deadline assigned to you by your loan provider.

Home sale. If letting your home go isn’t an issue, then you may consider selling it to receive the necessary funds to pay off your mortgage. This allows you to avoid the damage to your credit standing, as well as the costly fees associated with forbearance. A similar option would be to file a deed in lieu of foreclosure, which transfers the home’s title to the loan provider as a way of canceling the remaining debt balance. 

Repayment scheme: Setting up a repayment plan with your loan servicer allows you to pay back what you owe through a series of staggered payments under a fixed period. A portion of what you owe will be added to your regular monthly payments. 

Bankruptcy: Filing for Chapter 13 bankruptcy allows you to come up with a repayment plan to pay back what you owe in installments over three to five years, depending on your monthly income. This is the last resort that has serious repercussions and should only be considered if you and your loan servicer fail to come up with a repayment plan or if you don’t qualify for any of the aforementioned debt relief solutions.

The thought of losing your home in the middle of a pandemic is understandably frightening. Thankfully, there are still some options for you to explore before the reality of foreclosure sets in. 

Meta title: Mortgage Relief Options: What They Are and How to Get Them

Meta description: Homeowners across the country are struggling to pay their mortgage as the current global crisis rages on. If you’re one of the many people experiencing financial hardship during this difficult time, here’s what you can do to help save your home from foreclosure.