What is Mortgage Deferment?

In the difficult times brought about by the COVID-19 outbreak, homeowners across the country have been scrambling to figure out how to pay their mortgages. In this post, I want to detail one possible option for homeowners: mortgage deferment.

What is Mortgage Deferment?
Essentially, mortgage deferment allows homeowners to postpone payment. The missed payments are typically added to the end of the life of the loan. Many banks are being quite understanding right now, sometimes offering no added interest and up to three months of deferral.

How Can I Defer My Mortgage?
Contact your bank or loan provider to see what your options are. Each provider is offering different deferment options at this time. Since the coronavirus emergency is a rapidly evolving situation, these options continue to change all the time.

Do I Qualify?
Again, the situation is rapidly changing. Here’s what we know:

• Bank of America mortgage-holders potentially qualify for deferment; however, there’s no word on how long the bank will accept new deferments, and each deferment must be approved on a case-by-case basis.
• Single-family homeowners with mortgages insured by the Federal Housing Administration (FHA) are covered for 60 days of non-payment as of March 18. This may be extended, but either way, you should still talk to your mortgage lender to let them know your financial situation.
• The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae, Freddie Mac, and the Federal Home Loan banks, is providing hardship forbearance to impacted borrowers for up to 12 months.

Since many, if not most, workers do not have a sustainable income during these hard times, mortgage lenders are being extremely understanding. The best thing you can do to determine if you qualify for mortgage deferment is to call your lender; see if you qualify now, and ask to be kept up to date on policy changes if you don’t immediately qualify.

Tips to Save Money During This Difficult Time
Here are some tips to save money during the coronavirus pandemic:

• Is your gym closed? If not, do you feel comfortable attending? You may want to consider pausing payments.
• If you are a season ticket-holder for a sports team whose season has been canceled, call the ticket office to discuss your options.
• Call your credit card issuer. See if you qualify for a lower interest rate and higher card limit, which may help boost your credit card score in the long run.
• Consider pausing your federal student loan payment; as of March 13, borrowers can pause payments altogether for up to 60 days. Be sure to call your issuer to take advantage of this.
• Contact your utility providers and check to see if they’re offering any type of forgiveness program.

These are difficult financial times for all of us. However, we will get through this together. I hope that you and your family stay safe until this all blows over!

Are you interested in buying or selling a home? Contact us today at 713-364-5883 or info@angelfultzrealty.com.