With these uncertain times looming ahead many of us have to make tough financial decisions. Due to COVID 19 crisis, there are over 22 million Americans that are unemployed and those rates climbing. In these tumultuous times, Americans are finding out that they are unable to pay their mortgages, car payments, and other bills.
At The Trusted Home Buyer we feel that it is our duty to pass on some useful tips and knowledge to our fellow Americans, not just the ones in our home state of Arizona but across the country, that are having trouble with their mortgages. This article will consist of 4 parts.
- Mortgage Relief Programs
- Creative Ideas to help you with your payments
- Helpful Tips on Selling your property during the COVID crisis
- Some of the current challenges of selling your house right now
1. Mortgage Relief Programs
To start off simple the Consumer Financial Protection Bureau (CFPB) states that "If you can pay your mortgage, then pay your mortgage." However it is not that simple in a lot of cases. Check out the CFPB´s guide to the coronavirus mortgage relief options.
The CARES (Corona Aid, Relief and Economic Security) act covers federally backed mortgages in two parts
- A foreclosure moratorium: In short your house is safe from foreclosure and you are safe from getting evicted for 60 days.
- A right to forbearance for homeowners: this means that you are if you cannot pay your mortage than you can usually choose to have your payments reduced or or suspending for a fixed time period (up to 180 days)
However, the CARES act does not clarify what happens after the forbearance period is up. An article written by Forbes warns about the possible downsides of suspending your mortgage under the CARES act. Stating that individual lenders may ask for the total lump sum that is owed in a "ballon payment" once the fixed time period is over. So if you choose this route it is crucial for you to contact your bank or company that is servicing your mortgage and find a suitable post-solution.
How to Recieve Mortgage Forbearance
Following these steps you can find out if you can forbear your mortgage payments.
- Check which mortgage servicing company you have:
This easily be attained by simple checking your mortgage statement you receive every month.
2. Figure out who owns your mortgage:
This is easy with the Fannie Mae or Freddie Mac look up tools
Or if your mortgage is NOT owned by either Fannie Mae or Freddie Mac try searching for your mortgage on this database:
3. Contact your mortgage servicer or lender:
Just simply explain to them what your hardships are and be prepared before hand to answer questions on how much savings you have and other financial questions. You are entitled to up to 180 days of grace period if you are experiences financial issues relating to the COVID crisis. In the event that you have a private mortgage servicer then ask what sort of mortgage relief they may offer.
4. Ask for it in writing & Save the Documents:
If your mortgage servicer offers you special payments options make sure you save a hard-copy and digital copy (if possible) of the arrangement.
2. Creative Ideas to help you with your payment
Here are some of our practical ideas that we have brainstormed to help stretch your dollars in order to cover your mortgage payments:
Another person paying rent can greatly reduce the burden of your monthly mortgage payment. Be sure to vet the candidates to reduce the risk of getting COVID. Try starting out by asking friends and family before expanding your inquiry.
- Turn your property into a rental property:
This can also bring up your monthly earnings drastically. For example: If you are unable to make your mortgage payments, turning your home into a rental and moving in with family or friends for the time being is better than defaulting on your payments. If you have a house on several acres you can also rent lots to people with RVs. There are many different scenarios that turning your property to a rental can apply to.
- Downsizing to something that is more affordable:
With the uncertain times ahead, there is the need for many of us to tighten our belts and downsize. On a positive note, the big house will be waiting for you when this crisis clears!
3. Tips on Selling your home during the Covid Crisis
Selling your home due to financial issues should be last resort. The Real Estate market is on hold at the moment. Property values have not falling, yet however there are not much buyers. Though if you do need to sell your house follow our two tips to increase the potential of selling your home:
- Move Out before Selling:
At the moment it is considerable easier to sell a vacant home. It is safer for potential buyers to look at a vacant home versus a home full of inhabitants.
2. Do a 360 Virtual Tour:
If you cannot afford to move out before you sell, do a 360 degree virtual tour of your home so buyers can "walk through"using their computer. There are freemium options that allow one tour free at either Matterport (you need a camera that supports 3D) or Asteroom (You would need to purchase a cell phone kit for $60).
A virtual tour will help stop the spread of COVID and give potential buyers an awesome digital walk-through experience!
4. Some Current Challenges of Selling Your Home
Other than the lack of homes being sold right now there are other issues that you may run into while selling your home. On issue that is common for cash strapped individuals is not being able to make their house payments during the selling process. This can be exceedingly troubling because selling your house the traditional way may take up to 6 months.
There is a service called pricelift that help will help you cover your payments in the selling process. They require no money up front and will help you maximize your profits on the sale of your house!
Another issue is if you are not able to sell your house for enough money to cover closing costs, commissions, and your mortgage then consider selling your house to us, The Trusted Home Buyer. We are based in Arizona and Michigan and would love to help you out. If you cannot continue to make those payments and would like to net more money after the sale then check out our "Taking Over Payments" offer. The Benefits include:
- A fast sale - as quick as 7 days
- Money in your pocket within days
- Cash Advance: if you need to stay a bit longer
- We buy in As-is Condition
- No more stress or worry about covering the mortgage
- We Protect Your credit: If payments are past due we'll catch them up immediately