Here’s the # 1 question borrowers facing foreclosure should ask themselves, Mortgage Expert Says

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Homeowners who are struggling financially have options. Here is the main question they should ask themselves in this situation. (iStock)

As mortgage forbearance periods draw to a close, the latest Mortgage Bankers Association report showed that about 2.21% of homeowners remain in mortgage forbearance for the week ending Oct. 17.

But that still leaves over a million homeowners at risk of foreclosure as forbearance plans expire. But there is one question homeowners should ask themselves before any other if they are at risk.

“First and foremost, distressed borrowers should proactively ask their service agents, ‘What are my options? ”Said Jay Jones, executive vice president of services for Mr. Cooper Group. “The most important thing is to keep the line of communication open. It is up to service providers to ensure that they clearly inform borrowers of all the options available.”

If you’re looking for options to help you meet your monthly mortgage payments, consider taking out mortgage refinancing to lower your interest rate. Visit Credible to find your personalized rate and see how much you could save.

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Staying in communication is essential

Distressed borrowers should stay in touch with their mortgage agent to make sure they explore all of their options before they fall behind on their payments and be forced into foreclosure.

“There are different solutions that a borrower may not even be aware of, such as selling their home using an auction model to get the best price and keep as much equity as possible for a fresh start if they don’t. the more the means to pay, ”Jones said. noted. “Once a homeowner understands the options available to them based on their situation, they need to address specific questions about the solution they want to seek to ensure that it is the right decision for them. him.”

If you’re exploring your options and want to avoid foreclosure proceedings, refinancing your home loan could save you hundreds of dollars on your monthly payment. Visit Credible to compare multiple lenders at once and choose the one that gives you the best mortgage rate and the best refinancing fees.

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What to do if you’re having trouble making payments

As homeowners move out of the forbearance period, agents strive to put mortgage holders on the best path to success.

“As forbearance ends and moratoriums on foreclosures expire, repairers have a responsibility to help homeowners navigate their mortgage reinstatement or help them find solutions to successfully exit the mortgage. ‘forbearance and avoid foreclosure,’ Jones said. “Communication between borrowers and service providers is crucial. Service providers should ensure that they are helping homeowners successfully exit forbearance by helping them understand all of their available options, whether they are ‘act of selling their house or something. “

Here are some options available to homeowners to avoid going through the foreclosure process or a lengthy court battle:

Abstention

Mortgage forbearance programs are still an option for many homeowners. The Consumer Financial Protection Bureau (CFPB) sent a note advising homeowners that it was “not too late to apply for mortgage forbearance.” If a homeowner’s home loan is guaranteed by the Department of Housing and Urban Development (HUD) or the Federal Housing Administration (FHA), the Department of Agriculture (USDA) or the Department of Veterans Affairs (VA), they have up to ‘at the end of the national COVID-19 emergency. Additionally, loans guaranteed by Fannie Mae and Freddie Mac do not have a deadline for requesting COVID-related forbearance.

Refinance

Mortgage rates are currently at historic lows, and many homeowners could significantly reduce their monthly payments by refinancing. Visit Credible to be prequalified in minutes without affecting your credit score.

Modification

If homeowners are experiencing financial hardship and are unable to make their monthly payments, they can ask their mortgage agent for loan modification options to stop the foreclosure. These changes can include a lower interest rate or a change in loan terms for their repayment plan.

Sell ​​the house

The median selling price of existing homes rose 13% per year in September, according to the latest report on existing home sales from the National Association of Realtors (NAR). This gives more struggling homeowners the opportunity to sell their homes and even make a profit. It also decreases the risk of getting into a foreclosure and eviction sale.

“Whether it’s tapping into a homeowner’s equity, refinancing, or modifying the loan to reduce monthly payments, it’s critical that borrowers contact their agents to find out what options are available to them.” Jones said.

If you want to lower your monthly payment or revisit your options instead of foreclosure, contact Credible to speak to a mortgage expert and get your questions answered.

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Have a finance-related question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.


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