The U.S. Congress mortgage relief program is not the only option for obtaining financial relief during challenging times. You might not qualify for federally sponsored mortgage assistance but alternate strategies are still available.
Have you considered refinancing your home mortgage to alleviate some of your COVID-19-related financial challenges? Home mortgage refinance loans are available through numerous reliable lenders this year and ongoing. For some homeowners, this type of loan might be the only way out of COVID-19-related financial hardship.
While a refinance loan is not necessarily an exact homeowner relief program, it still provides the type of relief needed to potentially overcome your financial challenges. For example, a primary purpose of a refinance loan is to lower the monthly mortgage payments you are required to make. When mortgage forbearance is not an option, reduced monthly mortgage payments via a refinance loan is an otherwise huge relief.
Refinancing your home mortgage involves choosing between using the same lender or applying with a new financial institution. Refinancing therefore also means the possibility of choosing an entirely different mortgage overall. Loan terms are typically extended for mortgage refinances, which results in lower monthly payments.
Lower interest rates, typically referred to as annual percentage rates (APRs), are also common results when you refinance your mortgage. This is especially helpful during the early to middle phases of your mortgage repayment period, because early loan installments are heavily front-loaded with interest. Refinancing your home might literally save you thousands of dollars per year due to a reduced APR.
Homeowners aged sixty-two years or older might have even more money-saving options. Reverse mortgages are available to qualified homeowners to transform home equity into cash, which is usable to pay off balances on other outstanding debts. The equity in your home equates to the difference between how much you still owe on your mortgage and your home’s real market value. Please note: When you take out a reverse mortgage loan, the loan absorbs some or all the equity in your home.
As a result, you will not profit as much as previously expected when you sell your home, if you profit at all. A reverse mortgage is an option best-suited for older homeowners who:
• Have no intention of selling their homes during the duration of their lives.
• Can handle extended loan payment terms.
• Still need instant financial relief.
A short sale is another option to obtain mortgage help when you need it the most. A short sale involves selling your home for less than the amount you still owe on your mortgage. Many lenders accept the sale price in-full as payment-in-full, even if the sale price is less than the total owed. Some lenders do not, however.
Before entering a short sale agreement, be certain to understand your lender’s demands and requirements or you might end up owing both your old and new homes simultaneously.