Mortgage Relief and Refinancing Opportunities in the Wake of COVID-19
The U.S. Federal Housing Finance Agency (FHFA) recently took steps to provide relief to homeowners and renters impacted by #COVID-19. If you or someone you know is struggling with rent or mortgage payments due to unemployment or a decrease in income, help is available. Please visit the FHFA's Mortgage Assistance page for more information.
Who Is Eligible for Assistance? If you have a mortgage owned by Fannie Mae or Freddie Mac, you may qualify to reduce or eliminate mortgage payments for up to one year, without incurring late fees or having your #credit score affected. Though not required, many other lenders are offering similar assistance to those in need. In addition, for loans that are insured by the Federal Housing Administration (FHA), the FHFA has authorized an immediate freeze on all foreclosures and evictions for at least 60 days. This applies to new foreclosures as well as foreclosure actions currently in progress.
What Should I Do If I Need Help? If you believe the #COVID-19 pandemic will impact your ability to pay your mortgage, please reach out to your lender or a counselor from the Department of Housing and Urban Development (HUD) for help. To prepare for this conversation, you should calculate the percentage your income has declined and estimate what you can afford. This will help determine the amount you should be expected to pay.
Based on your situation, however, it may be necessary to eliminate the payment in full for a few months. If that is the case, you will have options regarding how your payments are affected in the future. You may prefer that the missed months are added to the back end of the loan or you might decide to have your payment increased slightly so that your payment schedule remains unchanged. Either way, you should be part of the decision-making process, so your bank is not making that determination without your input.
What If I Rent My Home or Own Rental Property? Fannie Mae and Freddie Mac are also providing assistance to help landlords and renters impacted by COVID-19. In coordination with the FHFA, landlords of properties financed by Fannie Mae or Freddie Mac may be able to postpone mortgage payments for up to three months if they are experiencing hardship due to the impact of the COVID-19 national emergency. As part of this plan, borrowers must agree to suspend evictions of tenants who are also facing financial hardship due to the current crisis.
Should I Consider Refinancing? #Mortgage rates have fluctuated significantly over the past few weeks. With rates near historic lows, you may want to consider refinancing options to reduce your payments. While refinancing to a lower interest rate may save you money over the life of your loan, you should be aware that it can also add years to your payment schedule. A trusted real estate professional or mortgage broker can help you with this assessment. It's also important to remember that all industries have been affected by the pandemic, and the real estate industry is no exception. Expanded loan processing times and delays are to be expected with a displaced workforce.
As Always, We're Here to Help While we're faced with a lot of uncertainty, you should take some comfort in knowing that options are available, and in many cases, lenders and landlords will do what they can to help you stay in your home. If you have been financially affected by the recent pandemic, contact your #mortgage provider for help on what relief programs are available to you. And, as always, please reach out to us if you have any questions about this or anything related to your portfolio and investments.
Click here to check out our COVID-19 Resources and Updates Page. This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer. © Copyright 2020 Commonwealth Financial Network®
Sara Romaine is a financial advisor at Blue Hills Wealth Management. BHWM is located at 300 Crown Colony Drive, Quincy MA. Sara can be reached at 617-471-6800 or firstname.lastname@example.org. Securities and advisory services offered through Commonwealth Financial Network, Member, FINRA/SIPC a registered investment advisor. Fixed insurance products and services and College Planning services offered by Blue Hills Wealth Management and College Funding Solutions are separate and unrelated to Commonwealth.