According to a recent report by ATTOM, one of the nation’s top providers of property data, “the total amount of U.S. homes with foreclosure filings in September 2021 are 19,609. This is a 24% increase from August and a 102% increase from September 2020.”
ATTOM also reported in May 2021 that one in every 12,700 homes is in foreclosure throughout the United States. Luckily, there are several different ways to help you if you are having a hard time making payments and live in the Hillsborough County and Tampa Bay area.
1. Request a Forbearance
A forbearance is an agreement between you and your mortgage servicer/lender. This allows you to either temporarily postpone your mortgage payments or pay your mortgage at a lower rate. Keep in mind that you will eventually need to pay back the full amount once your forbearance ends.
How Do You Request a Forbearance?
If you are having a hard time catching up with your mortgage payments, and are living in the Hillsborough County or Tampa Bay area, then you should call your servicer immediately and tell them about your situation. It is important to reach out to your servicer promptly as some require that you contact them within a specific time frame after a natural disaster or other acceptable circumstance.
When you do call your servicer, ask them if they offer any “forbearance” or “hardship” options as well as how you can request a forbearance. Also ask your servicer how they expect you to pay back any payments that were under postponement or were reduced. Forbearance options may vary depending on a few different scenarios such as:
· Your loan servicer.
· Requirements and terms of your mortgage.
· Type of loan you have.
What are some common forbearance options?
Check with your loan servicer to see which types of forbearance options they provide. It is important to know what each option is and how they vary so you can pick the best one for you.
2. Paused Payments Option (payments are made during the existing mortgage).
This option allows you to put a pause on making payments for up to six months. However, once the six months are up you will have to pay everything back at once.
3. Paused Payment Option ( payments are made at the end of the mortgage).
This option is like the one above, except that you can reduce or pause your payments for up to one year. Once the year is up. You can pay back the money adding it to the end of your mortgage loan.
4. Mortgage Payment Reduction Option
The mortgage payment reduction option allows you to reduce your monthly mortgage payment in half for up to three consecutive months. This means that if your monthly mortgage payment is $1,000 a month, you would only pay $500 for each month. Once the three months are complete. You have up to a year to pay back the remaining reduced amount.
The amount that you don’t pay will be divided by 12 months and will temporarily increase your monthly mortgage payments. You will see an increase starting on the fourth month and you will need to pay interest on any reduced amounts.
5. Repayment Through Installment or a Lump Sum
Repaying your overdue payments via installments or a lump sum is a great idea if you expect your financial situation to improve.
You should double check that you will be able to afford the payments since this is a large obligation due to making up on late payments.
6. Loan modification
A loan modification is exactly what it sounds like: the terms of your mortgage change for the payments to be more affordable. The only people who can help you modify your loan is your loan servicer.
7. Refinancing Your Mortgage
Refinancing your mortgage means that you’re swapping out your current mortgage for a new one. This usually means that you will also be receiving a different interest rate and a new principal.
Refinancing can also be used to add or remove someone from the mortgage, such as a divorce or an addition to the family.
8. Mortgage Moratorium
A moratorium is a period where there is no obligation for the borrower to make a payment. The moratorium is technically the waiting period before the loan is granted and payment begins once the loan receives approval.
This is a great option for those who need just a short amount of time to save extra money but is not a great long-term option.
Other Forms of Loan Modifications
Several other different modification approaches are available to struggling homeowners living in Hillsborough County or the Tampa Bay area. Some of these additional options include:
- Reduced interest rates
- Longer repayment periods
- Lowering the remaining principal balance
- Adding any missed loan payments to the overall balance
Before making a final decision, it is necessary to thoroughly research all your options and to understand each different method. Having a deep understanding of these different approaches will give you a variety of options for you to choose from to avoid further damaging your credit or even foreclosure.
Can You Sell Your House Before Paying Off the Mortgage?
The short answer is Yes. If you are seriously struggling with paying your mortgage, you can sell your house before paying off the entire mortgage.
It is actually fairly common for people to sell their house while still owing a mortgage.
There are two different options you have when selling your home before paying off the mortgage: a traditional sale or a short sale.
9. Traditional Home Sale
When selling your house the typical way, then it should be fairly easy to sell your home for more than what you owe on the mortgage. Paying your mortgage throughout the years creates equity for you to use when you sell your house.
After the closing of the home. The buyer’s proceeds provides the seller with additional funds which would pay off the rest of the mortgage, closing costs, home equity loans, and other debt obligations.
10. Short Sale
If you need to come up with a chunk of money fast, then having a short sale will provide that. You should know however, that a short sale will result in you selling your home for less than your mortgage amount.
Despite their name, short sales are actually heavy with paperwork and can take up to a year for processing. The benefit to this is that it does not affect your homeowner’s credit rating as much as a foreclosure would.
Conclusion
If you live in the Hillsborough County or Tampa Bay area. Hopefully these solutions will provide you with some options if you find yourself struggling to make your mortgage payments. If you need more assistance and guidance on how to do any of the options we provided. You can contact us at 813-666-5765.