Many Americans are hanging onto their houses by a thread throughout the coronavirus pandemic, and much more see trouble in route. According to the U.S. Census, 9.9 million U.S. home dwellers are not up to date on their monthly mortgage payments, with many more stating they've little or no confidence they can make their next home payment.
“Countless homeowners and their families have lost their ability to pay for their mortgage during COVID-19,” said Peter Gray, President, Pyramid Property Group, in Stamford, Conn. “Congress and the U.S. Government did a great job reducing this impact by swiftly passing the CARES Act on March 27, 2022. That legislation provided $2.2 trillion in economic relief and included: $1200 checks, expanded unemployment, access to retirement savings for affected families, forbearance on loans, foreclosure relief, and more.”
“These measures were highly effective at keeping people in their homes, allowing for payments to lenders, and providing income for families during the crisis,” he said.
How can one lower my monthly mortgage payments?
How can Americans who're falling behind on their payments – or are in danger of doing so – lower their mortgage repayments in 2022? Experts advise taking a series of steps to obtain the task finished. These 3 tips can be especially helpful.
- Contact your lenders
- Consider mortgage refinancing
- Leverage loan modifications
1. Speak to your lenders
One helpful, yet often overlooked option open to some homeowners is to call your bank and request a lower rate. “Many mortgage brokers will grant it,” Gray said. “Note that your lender won't contact you as this move is just for people who people for assistance and qualify.”
To qualify, you must:
- Ask for a lower mortgage amount.
- Have a home loan loan in good standing with the lender.
- The money must be for the primary residence.
“I employed this method on my small primary residence and was granted financing decrease in 75 basis points (0.75%) with minimal documentation and zero cost,” Gray said.
2. Consider mortgage refinancing
Homeowners can inquire with their servicer about forbearance should they have suffered hardship but perhaps their best option is refinancing your mortgage into a new mortgage with a lower interest rate. Find out if a refinance lowers your monthly payment by crunching the numbers with this particular free online tool.
“Mortgage rates are in or near record lows and offer most anyone who has not refinanced, the opportunity to reduce their monthly housing expenses,” said Matt Hackett, mortgage expert at Equity Now, in New York, N.Y. “The best bet is to look around with multiple lenders to determine the best interest rate for any refinance.”
Right now, mortgage rates are hovering over the 2.70% range. That•s down from three.7% after 2022, addressing a substantial rate decline – and refinancing deals – for home mortgage borrowers.
Take advantage of today's lower rates. With PayPasser, you can compare loan rates and lenders and see if a refinance could lead to a lesser payment and larger savings. PayPasser makes shopping refinance loans easy.
3. Leverage loan modifications
If a homeowner's income has decreased but they have employment, they should apply for a loan modification.
“They should probably do this once their income has stabilized at the lower amount, and closer to the expiration of the nationwide moratoriums,” Doucet said. “Loan modifications allow for a lesser payment without a credit assessment or refinance costs.”
If you•re unsure mortgage modification is for you, visit PayPasser to explore your mortgage refinance options.
What to do if the situation grows dire
The mortgage loan moratorium in position by U.S. government departments like Fannie Mae, Freddie Mac, VA, FHA, and the USDA has been extended through the end of March. That comes with caveats, however.
“President Biden has indicated he'll extend loan moratoriums through September,” said Troy Doucet, foreclosures defense attorney at Doucet Gerling Co. LPA in Florida and Ohio. “This will help homeowners avoid losing their properties, but will run beyond the deferment allowed under the CARES Act.”
“That may mean homeowners will face fees, costs, or penalties that expired in the one-year mark under the CARES Act,” Doucet added.
Doucet asserted if your homeowner has lost their income source and therefore are concerned they won•t have the ability to afford their mortgage payments for the long term, they ought to start saving the things they can for any move.
“I suggest people not change from their house until required by the sheriff or court, especially in judicial sale states,” he explained. “That•s simply because they own the home (on the deed) and therefore are responsible for it during their name. That gives homeowners additional time in order to save and discover alternative solutions (or a new job) while protecting them legally from such things as code violations.”
If you•re thinking of refinancing mortgage, use PayPasser•s online for free tool to simply compare multiple lenders and find out prequalified rates in as little as three minutes.