Understanding COVID-19 homeowner relief resources. How to find coronavirus relief for homeowners offered by mortgage lenders, banks and the government.
There’s a lot of confusion about what types of coronavirus relief resources are available for homeowners and who’s eligible for them.
Over 60 percent of homeowners have no knowledge of COVID-19 resources or are unsure if any relief programs apply to them, according to research by the STRATMOR Group, a data-driven mortgage advisory. But what’s more concerning is that 13 percent of homeowners either think the government will be making their payments for them or that they’ll just be able to skip their payments during the pandemic.
With 44 percent of homeowners concerned about making mortgage payments in the next 90 days and 27 percent unable to foresee making payments for more than five months if the pandemic continues, it’s important that homeowners understand the variety of assistance programs available at the government level as well as directly from lenders.
Understanding COVID-19 Homeowner Resources
Under the Coronavirus Aid, Relief, and Economic Security Act (CARES), homeowners have the right to request forbearance through their loan servicer for up to 180 days. Keep in mind that while forbearance allows homeowners to temporarily pause or reduce payments it doesn’t mean that payments are erased or forgiven. When the period of forbearance ends, a lump sum for the missed payments or a series of partial payments will be due until the account is brought back up to the date.
Homeowners who are struggling to make mortgage payments should first contact their lender directly and discuss all of the COVID-19 mortgage payment relief options available to them. Some larger lenders like Fannie Mae, Freddie Mac, Guaranteed Rate, Rocket Mortgage by Quicken Loans and banks like JP Morgan Chase, Wells Fargo, BMO Harris and Bank of America list their coronavirus relief resources for homeowners online.
Many states are also considering how they can help homeowners, with some offering property tax payment extensions or penalty waivers and others suspending foreclosures and evictions for a certain period of time.
As the coronavirus pandemic continues, it’s worth checking these resources for updates as more relief programs for homeowners may become available.
Rise in Refinance Activity as Homeowners Take Advantage of Record Low Mortgage Rates
Record low mortgage rates have led many homeowners to refinance their mortgage loans. Fannie Mae expects refinance volume to spike at a 17-year high this year as mortgage rates fall to their lowest level ever recorded.
“You should refinance your mortgage only if it makes sense financially,” noted Ilyce Glink, publisher of ThinkGlink.com and CEO of the award-winning financial wellness technology company Best Money Moves. “For some people, lowering the monthly payment will make sense, even if it means extending the loan term . But ideally, if you can reduce your monthly payment, lower the interest rate, shorten your loan term and keep refinancing costs in check, refinancing your mortgage is a no-brainer.”
Homeowners interested in refinancing should first pull a copy of their credit report and talk to a few different lenders to find out how much the refinance will cost, how much they’ll save and if it makes sense for them to move forward.