Among the most negatively affected sections of the U.S. population and in other countries are the renters and homeowners with outstanding mortgages and rents to their names.
With the national and local economies in a highly volatile state these days, businesses had to close down and companies had to furlough, layoff or cut down their workers’ time to save money without leaving the latter unemployed. In the U.S., some 3.3 million Americans had to file for unemployment benefits back in March 2020 — a record figure.
As a result, many Americans have been struggling to pay off their monthly rents or mortgages since money is hard to come by. This is made even harder by the fact that they have to worry about other essential expenses such as food, clothing, internet (for remote work and distance learning), and the like.
If you’re among the affected population, you should know that there are ways on how you can get help in making your mortgage or rent manageable. Here are four ways to keep your rent or home mortgage in order:
Ask your lender for payment deferrals.
The American Bankers Association (ABA) in 2020 took note of the steps that different banks have taken to assist clients who were struggling with their home equity loans and mortgage payments. The ABA revealed that lenders were willing to offer deferred payments for up to four full months or 120 days. Meanwhile, renters whose landlords were under Fannie Mae and Freddie Mac were given loan payment deferrals if they did not evict tenants.
Whether you’re a renter or a homeowner with a mortgage that you’re finding difficulty paying, be sure to check if you can avail of deferred payments with your landlord or lender. Many lending institutions or property owners are kind enough and are more than happy to offer legally-mandated payment reprieves for affected renters and mortgagees. With this, you can buy yourself enough time to bounce back financially and make your payments up-to-date.
See if you’re qualified for loan restructuring.
If you have a home equity loan and you don’t want to apply for forbearance but continue paying monthly, albeit with a lower than usual amount, see if your lender is open to the idea of restructuring your loan. In some cases, such an option is already included in the contract, so be sure to read your loan’s fine prints to check for such provisions.
The great thing about this option is that your loan will not accrue a huge interest since you’re paying a monthly amount even if it’s lower than the amount you’re supposed to settle every month.
Work out a payment plan with your landlord.
This works essentially similar to the previous one, only that it involves renters who are having a hard time settling their monthly rent’s full amount.
If you’re renting an apartment, it would be wise to talk to your landlord or property manager if you can pay an amount that’s below your supposed monthly rent. You just need to truthfully and sincerely explain your current situation with your landlord and work out a possible deferred payment plan while you keep your finances back to normal.
On many occasions, this arrangement has worked perfectly for both tenant and landlord since landlords do need to make money and would be more than willing to agree to staggered payments from their tenants. It won’t hurt if you’ll try out this route, especially if your landlord would be kind enough to accommodate your request.
Avail of all possible relief under the CARES Act.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act specifically provides for two kinds of protection for homeowners whose mortgages fall under GSE and the federal government.
For example, mortgages with USDA or FHA backing provides delayed foreclosure of properties until after March 31 this year. Meanwhile, GSE-backed loans (Freddie Mac, Fannie Mae, and VA) protect against foreclosure until after February 28, also this year.
Additionally, mortgagees who are experiencing financial problems are eligible for forbearance for up to 180 days or six months. Aside from this option, you could request another 180 days of extension, thus bringing the total number of reprieve to 360 days or a full year. This should be enough for you to bring your bearings back and gradually repay your outstanding mortgage obligations.
With these four tips to serve as your guide, managing your rental or mortgage problems should be easier on your end. Just act quickly if you want to avail of these reliefs, particularly those with a definite deadline of filing.