Mortgage assistance program is a government or private initiative designed to provide financial support and relief to homeowners with mortgage obligations.
During the COVID-19 surge, many homeowners lost their jobs and other income sources, resulting in the failure to pay mortgage fees on time. Fortunately, with the help of different government agencies, they created programs that help homeowners pay for their mortgage dues.
Now that the pandemic is at its waning stage, many are wondering if there are still mortgage assistance programs being offered. If you are one of them, this article will help you find suitable mortgage assistance based on your financial needs.
What is Mortgage Assistance Program?
A mortgage assistance program is a program that aims to help struggling homeowners pay their mortgage dues, utility, and other housing expenses. A mortgage assistance program can provide various services to homeowners. These include mediation services, financial aid, refinancing, loan refinancing, and foreclosure postponement.
Are you a struggling homeowner? You may be eligible for mortgage assistance. In the next section of the article, you will get an overview of the benefits of the mortgage assistance program, the services offered, and ways how to get one.
Here are some of the benefits of applying for a mortgage assistance program:
- It lessens your burden of paying mortgage dues
- Some programs offer free loan counseling
- Most mortgage assistance programs don’t require you to repay the assistance received.
What Does a Mortgage Assistance Program Offer?
If you get qualified for a mortgage assistance program, you may get assistance on the following:
- Loan Refinancing
- Loan counseling
- Postponement of foreclosure
- Mediation services
- Other utility expenses
Note: The type of services you will receive may vary depending on your financial needs. Read on to learn more about how to find a mortgage assistance program that is suitable for you.
Ways to Get Mortgage Assistance Program
Below is a list of ways how to get a mortgage assistance program.
Through the Homeowner Assistance Fund (HAF)
As per the American Rescue Plan Act of 2021, the federal government created this program to help homeowners struggling to pay their house expenses. The said assistance can cover past-due mortgages, utility bills, and home repairs.
Also, the fund received is not to be paid back. This is because the program is part of the government’s aim to help homeowners affected by the pandemic. To be eligible, you must meet the program’s income requirements and be able to provide the documentary requirements.
Refinancing your Existing Loan
Refinancing your loan is done by getting a new mortgage loan to pay off your old one. You will then have a new balance to pay on your new mortgage. This helps homeowners pay their mortgage dues and have more time to pay their new mortgage balance.
Is your current loan just ended forbearance? Worry not because you can still refinance your loan. Though before, it was hard to get qualified for a refinance if your loan just came from forbearance, now it’s easier since the beginning of the COVID-19 surge.
However, finding a new loan with lower interest rates is challenging. Though choosing a plan with a more extended payment period may be helpful in reducing monthly payments, you’ll not realize right away that you’ll pay higher interest costs which, in the long run, may accumulate.
Through Streamline Refinancing
Streamline refinancing is a way to refinance existing government-backed mortgage loans like FHA, USDA, and VA mortgage loans. Compared to conventional loans, streamlined refinancing is easier and more convenient since you don’t need to go through the verification process and submission of documents. Instead, the information on your existing federal mortgage loan is used to refinance your current loan.
Through streamlined refinancing, you will also benefit from low-interest rates and lower monthly payments. You can also apply for this type of assistance even if you have delinquent payments and negative equity. Negative equity means you have higher debts and liabilities than asset values.
Do you think you may be eligible for streamlined refinancing? You may inquire at the local FHA office in your state and ask for streamlined refinance on your current loan.
Through Loan Forbearance
If you need time to get financially stable before paying for your mortgage loan, you may put it under forbearance. Loan forbearance is when you stop paying your mortgage loan for a specific period because of financial hardship.
Loan forbearance though doesn’t mean that your loan will be forgiven, instead, you will still need to make up your payments once the forbearance period ends. You have several options on how to repay the loan such as through loan modification, lump sum payments, intermittent payments, or loan refinance.
Through Loan Modification
This is an option for homeowners who can’t afford to refinance their loan after forbearance. Loan modification refers to changing one’s loan by reducing monthly payments or extending the payment period. You can get your loan modified with the help of your loan servicer. Most qualified homeowners, however, are the ones who have permanent – rather than temporary – changes in their finances.
Loan modification is typically the last resort of homeowners who cannot afford other mortgage assistance options.
Ask for Help from State Housing Counselors
Are you not sure how to get mortgage assistance? A HUD-Approved counselor can help you find the right choice based on your mortgage needs. S/he can also help you find available resources in your community. Additionally, HUD-approved housing agencies can also offer free financial counseling to prevent foreclosure of your mortgage loan.
Mortgage assistance programs are a big help for homeowners who cannot keep their heads above water. There are different ways to get mortgage assistance such as through FHA, loan refinance, loan forbearance, or loan modification. I hope this article helped you find the right mortgage assistance program based on your needs.
Don’t know where to find a housing counselor? You can start by searching for one at the Consumer Financial Protection Bureau (CFPB).