September 22

Defer a Mortgage Payment: 19 Resources To Help With Your Mortgage9 min read

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Defer a Mortgage Payment: 19 Resources To Help With Your Mortgage9 min read

In today’s global and economic situation, financial hardships are becoming more and more commonplace due to hundreds of different factors, making homeowners need to defer a mortgage payment. 

Some unfortunate and unexpected events that can lead to deferring a mortgage payment can vary from losing a job or income, a divorce, an accident that incurs higher medical bills than expected, or even predatory college loans.

Sadly, these types of stories are extremely common these days, and these kinds of financially difficult situations can happen to just about anyone. The good news is that you may be able to defer a mortgage payment, depending on your mortgage terms. 

Check out these sources about late mortgage payments and payment deferrals:

Buying a home isn’t the only financial hurdle you’ll have to jump. Each month, you’ll have to make your payment on time. When financial storm clouds are gathering, you may find it difficult to pay your mortgage on time. In such a case, a mortgage deferral can keep you out of foreclosure while you get your finances together again. (budgeting.thenest.com)

26% of Americans have taken advantage of some type of payment deferral plan – CNBC (cnbc.com)

Summary:

  • even utility providers rolled out plans that allowed consumers to temporarily suspend payments.
  • About one in four Americans say they’ve taken advantage of some sort of payment deferral program because of the Covid-19 pandemic, according to the latest data released from Northwestern Mutual’s 2020 Planning & Progress Study .
  • The federal government, however, has put in place payment protections for student loan borrowers and renters through the end of the year.
  • “While there might be a temporary relief on current cash flow needs, any payment not being made today will have to be made at some point in the future,” Pepper says.
  • One of Unverzagt’s clients had her pay cut, but her job was secure, and she had money in the bank for emergencies.

The recently announced COVID-19 Payment Deferral solution returns a homeowner’s monthly mortgage payment to its pre-COVID amount by adding up to 12 months of missed payments to the end of their mortgage term without accruing any additional interest or late fees. (freddiemac.com)

The payment deferral option allows borrowers, who are able to return to making their normal monthly mortgage payment, the ability to repay their missed payments at the time the home is sold, refinanced, or at maturity. “For homeowners in forbearance due to COVID-19, payment deferral allows them to make up missed forbearance payments when they sell their home or refinance,” said FHFA Director Mark Calabria. “This new forbearance repayment solution responsibly simplifies options for homeowners while providing an additional tool for mortgage servicers. (fhfa.gov)

Defer a mortgage payment

Mortgage Payment Deferral with Freddie Mac and Fannie Mae

How do I know if Fannie Mae or Freddie Mac owns my mortgage? (aarp.org)

For example, if you have a Fannie Mae, Freddie Mac, FHA, VA, or USDA loan, you won’t have to pay back the amount that was suspended all at once unless you are able to do so. (consumerfinance.gov)

In turn, Freddie and Fannie are requiring landlords not to evict tenants facing hardship based solely on nonpayment of rent during the forbearance period. (aarp.org)

What Does It Mean To Defer A Mortgage Payment?

A deferred payment is a financial term that is used when you put off making a mortgage payment and instead choose to pay it later. It is important to note that you can defer a mortgage payment for only a short period of time.Additionally, you will eventually need to pay the mortgage in full. Finally, you might be charged interest on a deferred payment. The interest charged will depend on your lender, and might put you further into debt or introduce other financial hardships down the road.

Tip: When you ask for forbearance, determine whether late fees and interest will accrue during the forbearance period. (cnn.com)

The deferred payments will be due at the end of the loan, such as when your loan is paid off, refinanced or your home is sold. (freddiemac.com)

deferral of mortgage payments

Will A Mortgage Company Defer A Payment?

In most conventional cases, the mortgage company will usually agree to defer payments, but oftentimes the final decision is dependent on the lending company that signed off on the mortgage.

In a multitude of situations, the deferral can be an absolute win for both homeowner and lender, because it will ultimately keep you out of foreclosing on the property. 

If you think that you’re going to need to defer a mortgage payment, it’s advisable to contact your lender as quickly as possible to avoid foreclosure proceedings, or even a deed in lieu of foreclosure.

In the case of financial hardship and proving financial hardship, many lenders will typically approve a deferral.

Payment deferral may be an option if you are: Behind on mortgage payments or at the end of a forbearance plan Able to resume your regular monthly payments (your financial hardship is resolved). (knowyouroptions.com)

It’s also highly recommended that you can provide hard data that your financial hardship is a temporary issue and not an ongoing problem.

Borrowers need to keep in mind: mortgage forbearance is not mortgage forgiveness. (cnn.com)

If you’re unable to provide proof that you’re capable of resolving your financial hardship in a prompt and timely manner, then the request to defer a mortgage payment may be denied by your lender. 

mortgage payment deferred

Contact your mortgage lender: Payments may be deferred as coronavirus pandemic causes worker hardships – USA TODAY (usatoday.com)

Summary:

  • ” The vast majority of mortgage borrowers have loans that fall under Fannie Mae, Freddie Mac and the U.S. Housing and Urban Development guidelines.
  • Representatives from the bank said help is available for Chase mortgage customers who have been affected by the virus.
  • The bank said it is providing assistance, including fee waivers, payment deferrals and other expanded assistance for credit card, auto, mortgage, small business and personal lending customers.
  • If you need assistance, customers can call 1-800-869-3557 to speak with a specialist to discuss options available for their consumer lending.
  • They have a mortgage and home equity program where they are offering a 90-day payment forbearance with no late fees.

Are You Trying To Negotiate A Deal In Your Favor?

There may be instances where you’d like to arrange a deal with your current lender. For example, some lenders will often agree to waiving your late fees once you’re caught up on missed payments, giving you a sweetheart of a deal, as those late fees can come with a hefty fine against you.

Regardless of what kind of financial hardship you’re currently experiencing, you’ll have to come up with a irrefutable case on how you’ll be able to continue making on time payments in the future, especially if they’re going to defer a mortgage payment or come to another arrangement with you. 

By communicating with your lender as soon as you begin to experience financial hardship, you can typically make a stronger case for deferred payment. However, the decision will rest entirely in the hands of your lender, and in some cases, your request might be denied.

A Lump Sum Payment Option

If your mortgage is backed by Freddie Mac or Fannie Mae, you can request a specific repayment method beginning July 1, 2020 : Make one lump sum payment when your mortgage term ends. (businessinsider.com)

After making the lump-sum payment, Cwik opted to cancel the additional three-month mortgage relief program she says she agreed to be placed into earlier in the month. “I’m just a normal BofA mortgage account customer now,” Cwik says, but adds that she’s still concerned about the homeowners who don’t have the time, energy and fortitude to keep calling to make things right. “We have worked with the client and have resolved her issues,” Bank of America said in a statement to CNBC Make It. (cnbc.com)

Orchestrating A Repayment Plan

This can be done through a lump sum “reinstatement” payment, a repayment plan, or by rolling your missed payment into the mortgage balance so you can pay off the outstanding amount over the life of your mortgage. (homeguides.sfgate.com)

Requesting A Loan Modification

Another option is to apply for a loan modification, in which the loan company might add the deferred amount to the balance, increase the length of your loan or reduce the interest rate. (cnn.com)

California and the Trump administration issued protections this week that keep many tenants from losing their homes If after the forbearance period a borrower still can’t afford their original mortgage payment, loan modifications are available that would reduce monthly payments by extending the term of the loan. (latimes.com)

Skip The Stress Of A Deferred Payment By Selling Today

Have a late mortgage payment or having a late payment can lead to an increase in interest rates and even a higher level of debt, sometimes affecting your credit score. 

If the lender is unwilling to help, a late payment won’t usually show up on your credit report unless you are 30 days or more late. (budgeting.thenest.com)

Many lenders have issued statements saying they won’t report forbearance, missed payments, or late payments to credit bureaus so your credit score can stay in tact. (businessinsider.com)

If you’re trying to pay down any outstanding debt, move on from this negative experience as quickly as possible and potentially avoid a foreclosure in the process, EveryHouse is here to help you through the process. 

We can often make a same-day offer for your home, and in ideal situation, EveryHouse can close on your home in a few as 7 day.

We know that the current climate is more complex for people, and you don’t necessarily have the funds to go through with necessary repairs or renovations on your property. This is why we buy homes, to ultimately make life easier. Contact us today to see if we might be able to help with your situation.

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