If you’re like most people in the United States, your mortgage is one of your biggest monthly expenses. So, what can you do to pay off your debt amid the COVID-19 pandemic? And what do you do when there is a pandemic and your income falls? Fortunately, homeowners who are having difficulty paying their mortgages have several options to choose from. Here are a few options.
Contacting your lender and outlining your situation is a good place to start. In times of financial difficulty, many lenders are willing to make a deal with borrowers and may be able to give relief options such as forbearance or deferment.
Forbearance allows you to postpone or reduce your monthly payments for a short period of time. In most cases, you can take use of this option for a period of three to six months and can be extended if you need more help.
Deferment is another way to delay loan payments. This option is typically used when a loan is in danger of not being paid on time.
If you find yourself unable to pay your mortgage, it’s important that you immediately inform your lender and explain your situation. They may be able to assist you to get through these difficult times.
You don’t have to freak out right away. There are ways to make your mortgage less of a burden during these difficult times. Some lenders are offering alternatives such as extended payment terms or reduced interest rates to borrowers who are affected by the pandemic.
If you’re still having financial difficulties, consider reaching out to a nonprofit organization that focuses on disaster relief assistance. These organizations may be able to provide temporary financial support to keep you afloat until you can get back on your feet.
No one knows how long the pandemic will persist, but by taking advantage of relief options and remaining calm, you can get through these difficult times. Here are some tips for you:
- Refinance your mortgage. You may be able to get a reduced monthly payment by refinancing if interest rates have fallen since you first financed your house.
- Make bi-weekly mortgage payments. This option allows you to make half-payments every two weeks instead of a single monthly payment. This can accelerate the process of paying off your mortgage and reduce the total amount of interest you have to pay.
- Make a lump-sum payment. If you have additional money, you might want to consider making a one-time payment on your mortgage. Reduced amount of interest and completion of your mortgage earlier are also benefits of this approach.
Of course, before making any decisions on how to manage your mortgage during the pandemic, it’s important to consult your loan officer or bank. They can assist you in understanding your alternatives and make the best financial decision for your current situation. If you acquire a cheaper interest rate, you’ll save more money over time.