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About Mortgage Assistance Program
A mortgage, for a lot of people, is by far the biggest financial decision that they will ever make.
Buying a home is an emotional process and owning one is a huge source of happiness and pride but is also a big responsibility.
Apart from worrying about the monthly payments and interest that is added to the loan, you will also have to take care of the home and its roofing, plumbing, etc.
You can quite easily fall behind on payments or even owe more on the house than its actual worth, particularly with a slow-moving economy.
Fortunately for the borrowers, there are several private, state, and federal mortgage assistance programs designed to relieve you of some of the financial problems and stress.
Where to find a Mortgage Assistance Program?
Whether you have already fallen behind on payments or struggling to make them, you may work with your current lender and develop an improved payment plan, waive some fees, or reduce the interest rate.
To avoid foreclosure and all the hassle and costs that come with it, it will be in your lender’s interest to assist you with it. Many state and local governments also offer mortgage assistance programs.
These programs include assistance with mediation services, refinancing, loan counseling, free legal counseling, financial aid, and foreclosure postponement.
The federal government has administered some mortgage assistance programs like HARP (Home Affordable Refinance Program) through the HUD (Department of Housing and Urban Development).
Although at the end of 2016 many federal mortgage assistance programs were terminated, other programs are still available to choose from depending on various factors like, whether you are unemployed, disabled, or in the military, whether the situation you are in is temporary or permanent, and how far behind your payments you are.
Types of Mortgage Assistance Programs Available
There are several types of mortgage assistance programs available for borrowers to choose from depending on their conditions. Here are some of the major types of assistance programs.
- Refinance or Modify– One of the most common types of mortgage assistance is a refinance. While modifying your mortgage means making a permanent adjustment to it by lowering the monthly payments, decreasing your total amount of loan, extending the loan term for paying the loan off, or acquiring a lower more favorable interest rate. By Refinancing you pay off your existing loan using a new one with terms that offer you more benefits comparatively.
- Financial Aid-This is another one of the helpful mortgage assistance programs. These types of programs provide borrowers assistance through interest-free loans, grants, by waiving some charges, fees, or sometimes even through a second equity loan or mortgage.
- Loan Forbearance-A ‘forbearance’ is a temporary suspension or reduction of your monthly payments. You may be allowed this type of assistance if you are looking to avoid foreclosure. You may also be provided with an improved or affordable payment plan by your lender, after the forbearance period ends, in order to help you pay the missed amounts back.
- Unemployed Homeowners– Some programs and mortgage companies allow you to make partial payments or defer them if you are underemployed or unemployed, while you are looking for permanent employment. One such assistance program in California provides unemployed homeowners up to $3,000 a month, for a period as long as eighteen months. This temporary program offers some relief to the borrowers or homeowners while they try and get back on their feet and helps them avoid losing their home, although the interest continues to accumulate.
- Mediation Programs and Foreclosure Postponement– A slowdown to the process of foreclosure or even postponements are provided by some programs and state laws. This helps the lenders and borrowers work together through mediation and implement a reasonable plan that would allow the homeowner to avoid foreclosure.
- Hardest Hit Fund– These are funds that are specially set aside by the federal government, for the parts of the country that were hit hard by the housing crisis. This program fund helps homeowners with moderate and low income, find mortgage assistance when they are unemployed, reduce their loan amount, or helps them switch to a new house after a short sale, and provides many other benefits.
- Avoiding Foreclosure– It is nerve-wracking to even think about losing your home, especially after having invested so much of your time, money, and emotions in it. However, none of us are guaranteed immunity from financial problems and thus we face one sooner or later. Sometimes these can lead to foreclosure. You can get help from and contact an attorney that specializes in providing alternatives to avoid foreclosure and thus help you get back on course. A good and skilled attorney will assist you with your legal options and discuss and decide what might be the best strategy for you.
