The pandemic has generated great excitement in the United States mortgage market as homeowners struggle to keep track of mortgage payments. (iStock)
Many Americans are hanging from their homes by a thread during the coronavirus pandemic, and many more see problems along the way. According to the United States Census, 9.9 million US residents are not up to date on their monthly mortgage payments, with many others saying they have little or no confidence that they can make the next payment on their home.
“Millions of homeowners and their families lost the ability to pay their mortgages during COVID-19,” said Peter Gray, president of the Pyramid Real Estate Group, in Stamford, Connecticut. “Congress and the US government did a great job of reducing that impact by quickly passing the CARES Act on March 27, 2020. This legislation provided $ 2.2 trillion in economic relief and included: checks for $ 1200, rising unemployment, access to retirement savings for affected families, loan tolerance, foreclosure relief and more. “These measures were highly effective in keeping people in their homes, allowing payments to creditors and providing income for families during the crisis,” he said.
How can I lower my monthly mortgage payments?
How can Americans who are behind on their payments – or at risk of doing so – reduce their mortgage payments by 2021? Experts advise taking a series of steps to get the job done. These three tips can be especially useful.
- Contact your creditors
- Consider mortgage refinancing
- Take advantage of loan modifications
1. Contact your creditors
A useful, though often overlooked, option available to some homeowners is to call your bank and request a lower rate. “Many mortgage lenders will grant it,” said Gray. “Please note that your lender will not contact you, as this change is only for people who ask for help and qualify.”
To qualify, you must:
- Ask for a lower mortgage amount.
- Have a mortgage loan up to date with the lender.
- The money must be for your primary residence.
“I used this technique in my primary residence and obtained a loan reduction of 75 basis points (0.75%) with minimal documentation and zero cost,” said Gray.
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2. Consider refinancing mortgages
Homeowners can consult with their administrator about tolerance if they have experienced difficulties, but perhaps the best option is to refinance your mortgage into a new mortgage with a lower interest rate. See if a refinance reduces your monthly payment by processing the numbers with this free online tool.
“Mortgage rates are at record or near-record levels and offer the vast majority of those who have not refinanced the chance to reduce their monthly housing expenses,” said Matt Hackett, mortgage expert at Equity Now in New York, NY. best bet is to research with several lenders to determine the best interest rate for a refinance ”.
Mortgage rates are currently fluctuating in the 2.70% range. That dropped 3.7% at the end of 2019, which represents a significant drop in rates – and better refinancing deals – for homeowners.
Take advantage of today’s lowest rates. With Credible, you can compare loan rates and lenders and determine whether refinancing can result in a lower payment and greater savings. Credible makes it easy to buy loans to refinance.
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3. Take advantage of loan modifications
If a home owner’s income has declined but he still has a job, he should apply for a loan modification.
“They should probably do this when their income stabilizes at the lowest level and closest to the end of national moratoriums,” said Doucet. “Loan modifications allow for a lower payment without a credit check or refinancing costs.”
If you are unsure whether the mortgage modification is for you, visit Credible to learn more about mortgage refinancing options.
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What to do if the situation gets dire
The mortgage lending moratorium in place by U.S. government agencies like Fannie Mae, Freddie Mac, VA, FHA and the USDA has been extended until the end of March. This does come with caveats, however.
“President Biden has indicated that he will extend the loan default until September,” said Troy Doucet, foreclosure defense attorney at Doucet Gerling Co. LPA in Florida and Ohio. “This will help homeowners avoid losing their homes, but it will go beyond the postponement allowed by the CARES Act.”
“This could mean that homeowners face fees, costs or penalties that expire within one year under the CARES Act,” added Doucet.
Doucet said that if a homeowner has lost his source of income and is concerned that he will not be able to afford mortgage payments in the long run, he should start saving as much as he can for a change.
“I recommend that people do not leave their homes until they are required by the sheriff or the court, especially in states of judicial sale,” he said. “That’s because they own the property (in the deed) and are responsible for it as long as it’s on their behalf. This gives owners more time to save and find alternative solutions (or a new job), while legally protecting them from things like code violations. “
If you’re thinking about refinancing mortgages, use Credible’s free online tool to easily compare multiple lenders and see prequalified rates in just three minutes.
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