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HOME values have skyrocketed during the pandemic to where they may now be unaffordable – but you may still be able to get some help.
Due to prices not growing at the same rate as income, median American households now require just over 32% of their earnings to cover mortgage expenses, according to the Federal Reserve Bank of Atlanta.
That number is the biggest since November 2008, when 34.2% of income was required to cover mortgage payments.
The housing surge can be ascribed to low inventory and low mortgage rates, although these rates have been increasing as of late.
If you find yourself under pressure to pay your mortgage, you can still file for forbearance thanks to the Federal Housing Administration (FHA) lately extending the relief option.
If you file now to have your mortgage payments paused, you might be eligible for forbearance for up to a year.
To begin with, you will be given a forbearance of six months with the choice of implementing an extension for an extra six months.
In the meantime, borrowers who filed before October might have up to 18 months in some cases.
Previously, filing for forbearance on an FHA loan was set to end on September 30.
The FHA is encouraging those struggling to come up with mortgage payments to get in touch with their lender.
By doing that, homeowners can get hold of a mortgage payment COVID-19 forbearance or home equity conversion mortgage extension, according to the FHA.
You can also contact a HUD-sponsored housing counseling agency for inquiries about forbearance, renting, or buying a home.
Another alternative could be lowering your mortgage payments through refinancing if you can get a lower interest rate on your home.
For example, let’s think that the cost of your home (in New York) was $400,000 and the loan included an interest rate of 5.125% with a term of 25 years.
According to NerdWallet, you would lessen your monthly mortgage payment to $1,190 from $2,368.
Plus, owners who have low-income can save up to $3,000 annually by refinancing.
Reference Source: The U.S. Sun
