The coronavirus pandemic has caused job and income loss for millions of Americans. Fortunately, there is relief available to homeowners who risk falling behind on their mortgage payments.
Since March, many have found mortgage relief in forbearance. There are currently about 3.5 million Americans in a forbearance on their mortgage. Any homeowner experiencing financial hardship has the right to request forbearance.
What is mortgage forbearance?
Forbearance allows borrowers to pause or temporarily reduce mortgage payments for a certain period of time, but these payments eventually will come due. With most forbearance agreements, lenders and servicers expect repayment in full over time. While the forbearance period gives homeowners much-needed help, some borrowers are facing economic challenges as they prepare to exit forbearance.
“It’s vital to analyze if forbearance is the best option and consider its potential impacts,” said Prosperity Home Mortgage Regional Market Manager Eric Spottswood. “Each person’s scenario is unique, and it’s always wise to talk to a trusted Mortgage Consultant before making any decisions regarding going into forbearance. My advice to borrowers is to always make payments if you have the ability to do so.”
What options are available?
For those struggling to make monthly mortgage payments or playing “catch up” on repayment plans and the forbearance period is set to expire soon, consider the options available. No one wants to risk triggering foreclosure. Contact your mortgage lender to discuss possibilities including refinancing a mortgage, loan modification or extending mortgage forbearance. Another option many homeowners may not realize they have is the ability to sell their house in this time of need and avoid foreclosure.
“With the growing equity that homeowners have available today, making a move might be the best option to protect your financial future,” said CEO Christy Budnick, president of Berkshire Hathaway HomeServices Florida Network Realty. “Many homeowners in mortgage forbearance would get the equity out of their home in today’s market, putting them in a better financial position than trying to hold on and ultimately having to go into foreclosure.”
For those contemplating selling their home, the current real estate market is booming. Record low interest rates are motivating buyers while limited homes available for sale and price appreciation are providing sellers with a unique opportunity to maximize their homes’ value and earn more profit. The low inventory of homes available for sale is driving home price increases. Most sellers, if their home is well priced, in good condition and in a good location, will make between five to 15 percent more on the sale of their home than they would have at the beginning of this year.
True market value
To determine a home’s value, online valuation estimators are a good place to start. They are available on many websites, including Berkshire Hathaway HomeServices Florida Network Realty, at https://bit.ly/36jXqgB.
While a valuation tool is a useful starting point, a home’s true market value and an individual’s equity position are best determined by a trusted Realtor who understands the local market and has expert knowledge. Contact a Berkshire Hathaway HomeServices Florida Network Realty Realtor for no obligation competitive market analysis.
To learn more, visit FloridaNetworkRealty.com. For more information on Prosperity Home Mortgage, visit PHMLoans.com.
What to do when mortgage forbearance ends
- Contact your mortgage lender
- Refinance your mortgage
- Consider a loan modification
- Extend your mortgage forbearance
- Sell your home for equity