Avoid Foreclosure If You Are Falling Behind On Mortgage Payments

According to research released in mid-October by the data firm CoreLogic, In July, 1.4% of homeowners with a mortgage were late with their payments by four months or more. 

That was the highest mortgage delinquency rate in more than 21 years.  

The implosion of your credit score and ending with a potential foreclosure once moratoriums end is what the late and missed payments are going to lead to!  

If your income has been disrupted you can still avoid becoming delinquent.

Millions of Americans who requested forbearance under the CARES Act have put their mortgage payments on hold, though they’re protected, for now, their debts have only been delayed — not forgiven.

The act can offer temporary relief to any homeowner with a federally backed mortgage. That includes:

• Loans sold to government-sponsored mortgage giants Fannie Mae or Freddie Mac.
• Mortgages guaranteed by U.S. agencies including the Federal Housing Administration, the Department of Veterans Affairs, and the U.S. Department of Agriculture.

You still have time to apply for six months of mortgage forbearance if you qualify. And if you’re already in forbearance, you can apply for an extension of another six months.

Now start planning for the future and improve your situation in the next few months. By the following ways:

Refinance into a lower mortgage rate

As the mortgage rates are still all-time low and refinancing to a lower rate could save hundreds of dollars off your monthly payments.

Even though you require to have a steady job before a lender will grant you a new loan, but if you’ve got a solid credit score, a co-signer, or if can demonstrate that you have other sources of income, such as investments or disability payments, lenders might make an exception.

Once you’re confident your score is good, shop around for quotes from multiple lenders to get the best rate possible when you refinance.

Talk to your lender about modifying your loan

If you are unable to refinance, then talk to your lender about getting a mortgage loan modification.

With a loan modification, you may be able to extend the length of your loan to reduce your monthly payments, lower your interest rate or switch from an adjustable-rate to a fixed-rate mortgage.

Do it at the earliest so you’re not in danger of defaulting on your loan, as the loan mod application process can sometimes take up to 90 days.

Be aware that this will cause your credit score to drop, and also know that if you extend your term, you’ll end up paying more in interest over the course of your loan.

Consolidate your debt

If you’ve put your other debts off to the side for the time being as your home takes priority. And if you’re only making the minimum payments on high-interest debts like credit cards, you’re increasing the compounding interest that will only make it harder for you to scrape by in the future.

If your credit score is good, we suggest you to consider bundling your non-mortgage debts together into a low-interest debt consolidation loan. 

This way you will only pay a single monthly payment at a better interest rate, and you’ll have more money left over to put toward your mortgage.

Cut down on your other monthly bills

Saving some money off your other monthly expenses can help to offset the cost of your mortgage.

Free apps like Truebill can help you easily find and cancel any subscriptions you no longer want and let you know if the services you do use regularly go up in price.

You might also be able to save some money by shopping around for a lower rate on your car insurance. The best practice is to check for lower rates every six months.

You can compare quotes from multiple insurers for free, and may be able to find the same coverage you currently have at a much lower price.

Look out for more stimulus relief

Depending on the results of the upcoming election, a new stimulus package could be announced in the New Year, and it may include mortgage relief measures similar to those in the original CARES Act.