Starter Home Scheme For Young First
Available in the UK, the Starter Home scheme is a new government program whereby 200,000 newly constructed homes are available to first-time homebuyers under the age of 40 years. The program helps buyers get at least 20% off the current market price of a home. The caveat is that the discounted price for the properties should not be over £450,000 in London, and over £250,000 outside of London.
This can be a great way to save a large amount of money off the regular price of a home, and effectively reduce your mortgage payments. Not only will the loan amount be reduced, but so will the interest payments over the term of the loan, which could effectively translate into tens of thousands of dollars saved.
Mortgage Help For The Unemployed
If you have lost your job, had a reduction in work hours or income, or are unemployed, then you may qualify for assistance. Homeowners can receive mortgage help from the federal government Home Affordable Unemployment Program. This program can reduce someones monthly mortgage payments for up to 6 months, which will provide an individual time to find a new job. Read more on the unemployment mortgage program.
Another program offered to assist individuals and families with their mortgage payments if they had a reduction in income, either from job loss, a reduction in hours, unemployment, or a medical emergency, is the HUD Emergency Homeowners Loan Program.
The Hardest Hit Fund was created to provide additional options to residents of those states that have the highest unemployment rates, most significant job losses, and that have been hit hardest by the nations housing crisis. This program is only available in certain parts of the country. Borrowers can qualify for zero interest rate loans that do not need to be repaid, so these can be thought of as grants. Click here to read more on Hardest Hit mortgage fund.
Consider Selling Your Home
If your circumstances are unlikely to improve, you may be better off selling your home.
This is a tough decision to make. But it’s better to sell your home yourself than have a lender take possession and sell it. You’re likely to get a better price and you’ll avoid paying any legal costs passed on by the lender.
Selling your home is a big step to take, so talk to a financial counsellor or get legal advice first.
Another option is to live somewhere else and rent out your home until you can afford the repayments again.
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If I Cant Avoid Foreclosure Will I Have To Pay Back My Loan
If your loan closed before January 1, 1990, and we have to pay back the amount of your loan to the servicer, youll need to pay this amount back to the government.
If your loan closed on or after January 1, 1990, youll have to pay back the amount of your loan if we find evidence of fraud, misrepresentation, or bad faith on your part.
Department Of Housing And Urban Development
The U.S. Department of Housing and Urban Development has a foreclosure prevention department, working with homeowners and lenders to address issues facing struggling borrowers. As part of HUD’s services, the Special Forbearance program gives unemployed homeowners a suspension of their mortgage payments for 12 months, with an extension possible for another 12. There is also an emergency loan program.
For homeowners underwater on mortgages, meaning the loan is valued higher than the home’s value, HUD offers a Principal Reduction Alternative program and a Treasury/FHA Second Lien program. Both of these programs require borrowers to be current on all mortgage payments. A HUD counselor works with homeowners, assisting in the negotiation with lenders to reduce principal and overall debt associated with the home.
Other modification programs exist, but many programs have expired or are expiring. These include Home Affordable Modification Program and Home Affordable Refinance Program , which are being replaced with more comprehensive modification programs. While these don’t pay for the house per se, they make staying in the house more affordable. Talk to a local HUD counselor for current options.
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Types Of Reverse Mortgages
- Federally Insured Reverse Mortgages – Known as Home Equity Conversion Mortgages
- Proprietary Reverse Mortgages
- Single Purpose Reverse Mortgages
When finding a lender remember:
- Be suspicious of anyone claiming that you can own a home with no down payment
- Seek out your own reverse mortgage counselor
- Never sign anything you do not fully understand
- Make sure the loan is federally insured
Repayment Through Installments Or A Lump Sum
This is a way that homeowners can pay overdue payments after their financial situations improveif servicers allow it. With a repayment plan, you make your regular payment amount, plus an additional amount, for as long as it takes to make up for the late payments. Of course, servicers must be convinced that your financial situation has improved to the point where you can handle a larger monthly obligation.
This may be an option for homeowners who have remedied their financial problems and can handle an even larger monthly obligation. It can work, but know your financial situation, Rheingold cautions.
If you can pay back mortgage payments in a lump sum, the servicer makes your account current and reinstates your loan. But fees may up the total. You may need a lot of money to make that happen, says Rheingold.
The challenge is coming up with a big chunk of money. And borrowing it is probably not a good strategy if youre just recovering from financial woes.
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What To Provide To Your Lender Or Mortgage Broker
Before preapproving you, a lender or mortgage broker will look at:
- your assets
- your income
Youll need to provide the following:
- proof you can pay for the down payment and closing costs
- information about your other assets, such as a car, cottage or boat
- information about your debts or financial obligations
For proof of employment, you may have to provide:
- a proof of your current salary or hourly pay rate (for example, a recent pay stub
- your position and length of time with the employer
- notices of assessment from the Canada Revenue Agency for the past 2 years, if youre self-employed
Your lender or mortgage broker may ask you to provide recent financial statements from bank accounts or investments. This will help them determine if you have the down payment.
Your debts or financial obligations may include your monthly payments for:
Get Professional Help Exploring Options
Foreclosure is a stress-filled situation no homeowner wants any part of, but unexpected financial setbacks happen to some of us and it helps to know where to go for assistance.
The first stop always should be your lender. They dont want to foreclose on you. It costs them far more to foreclose a home than to work with the consumer on finding an affordable mortgage payment. Ask them for assistance and you will be surprised at how willing they are to keep you in the home.
If that doesnt work, research the many programs offered by the Housing and Urban Development, the federal agency that oversees housing issues in the United States.
Beyond that, consider a HUD-approved nonprofit credit counseling agency is another source of help for mortgage and housing counseling. They can look at your income and expenses and offer suggestions that could create enough room in your budget to make payments on your mortgage.
In short, there are ways to deal with foreclosure.
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If I Am A Landlord Is Financial Assistance Available
If you’re a landlord struggling to pay your mortgage because your tenants have been impacted by COVID-19 and are having difficulty paying their rent, the Consumer Financial Protection Bureau has helpful information on state and local programs offering rental assistance. Eligibility varies, but landlords can often apply directly, and may be able to receive direct payments. Each rental assistance program has conditions, and landlords and tenants should contact the program in their area to find out how to get started. Or if you would like personalized help from a HUD-approved housing counselor, call our Disaster Response Network directly at . These counselors can help you navigate the rental assistance application process for your tenants.
Federal Housing Administration Forbearance
Technically the Federal Housing Administration Special Forbearance isn’t a grant, but it accomplishes the same thing no cash out of pocket for mortgage payments without modifying your loan. If you have an FHA loan, ask your lender about the forbearance. Forbearances are available for eligible loans when borrowers become unemployed. The forbearance suspends mortgage payments for up to 12 months.
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Same Mortgage Lower Associated Payments
Another route is to seek to lower the costs associated with owning a home. One is to shop for a better price on your property insurance to reduce your total monthly home-related costs.
Another is to find out whether youre eligible for property tax abatements in your area, says Rheingold. Especially for seniors, this can lower your monthly mortgage payout.
Another option is to seek to end your private mortgage insurance , so you can get out from under this payment. If youve built up enough equity in your home, this may be possible. All too often, homeowners let this payment go on longer than necessary. If you havent eliminated it already, your financial troubles may be the impetus for doing so.
However, PMI can sometimes be used to save your home if the servicer is threatening to foreclose. In this event, you can file a partial PMI claim. Rather than paying a full claim to your servicer to prevent foreclosure, the insurance company pays the servicer just enough to cover your missed payments. To see if this would work, read your PMI policy documents carefully or consult a real estate attorney.
What Are The Benefits Of Using A Calculator When You Want To Refinance Your Home
A cash-out calculator is a valuable tool that will help you figure out the terms of your new loan and whether the refinance is feasible. Suppose you don’t yet qualify for cash-out refinance. In that case, a calculator will provide crucial information on how much equity you’ll need to build to qualify and whether its a good financial decision.
One overlooked benefit of mortgage calculators is that you can compare loans from different lenders. Factors that will differ from one lender to another include interest rates and how much you can borrow. This way, youll be able to pin down which loan works best for you.
Another great thing about mortgage calculators is that they can help you budget, so you borrow only as much as you need. You can fully plan for the cash-out, be it to make home repairs or use it for debt consolidation. They make the financial aspect of refinancing your home much infinitely easier as you can see the impact of how much your retained equity will impact your monthly payments.
All in all, mortgage calculators are invaluable tools from start to finish.
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Avoid Delays Fill Out The Application Form Correctly
Here are our top five tips for filling in the paperwork or online application. Even if you end up getting a broker to help you, its normal for you to be asked to check it first so make sure you:
DO state your income exactly. Dont round up.
DO give your FULL NAME even middle names are necessary.
DO declare ALL your debts.The lender will find them anyway and withholding the info can mean a quick decline.
DO get your three-year address history exactly right, including postcodes.
DO give honest answers when asked about how much you spend.
Smi Is Paid To You As A Loan
SMI used to be paid as a benefit. However, since April 2018 it has come in the form of a loan.
What this loan means is you have to pay back the amount the state paid into your mortgage for you when you sell the house or pass the ownership to someone else. These loans will also attract interest, though the rate’s quite low at 0.3% however, because you’re not paying it back, the interest will compound.
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What If You Have A Non
Federal regulators believe most non-government-backed lenders and loan servicers will adopt policies similar to those mandated by the CARES Act. To find out, contact your loan servicer, ask what programs they have in place to help homeowners impacted by the Coronavirus outbreak, and follow any instructions you are given.
Although the CARES Act does not require private lenders to offer relief, if you and your lender come to any type of loan modification agreement, the law regarding not reporting reduced or paused payments to does apply to you.
If your mortgage forbearance is set to expire soon, you may be able to request an extension but you must apply before forbearance ends.
How To Add Someone To Your Mortgage
This article was co-authored by Ryan Baril. Ryan Baril is the Vice President of CAPITALPlus Mortgage, a boutique mortgage origination and underwriting company founded in 2001. Ryan has been educating consumers about the mortgage process and general finance for almost 20 years. He graduated from the University of Central Florida in 2012 with a B.S.B.A. in Marketing.wikiHow marks an article as reader-approved once it receives enough positive feedback. In this case, 100% of readers who voted found the article helpful, earning it our reader-approved status. This article has been viewed 277,085 times.
Many people wish to add someone to their mortgage with a major life change, most commonly marriage. If you and your spouse are living together and sharing the rest of your expenses, why shouldnt you bear the legal and financial responsibilities of homeownership together? Unfortunately, your lender will probably not make it easy for you to do this. Moreover, it might not be in your best interests. If you do decide to go down this path, make sure you are armed with the right information.
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Mortgage Help For Homeowners Impacted By The Coronavirus
There are hardship programs in place to help homeowners who have been directly or indirectly affected by the coronavirus and are struggling to make their mortgage payments. The Federal Housing Finance Agency , which oversees Fannie Mae and Freddie Mac, encourages homeowners adversely impacted by the coronavirus who are having difficulty paying their mortgages to reach out to their mortgage servicers as soon as possible. As the Consumer Financial Protection Bureau advises, you can find the number for your mortgage servicer on your monthly mortgage statement or coupon book.
FHFA has established a dedicated webpage with relevant updates and resources available here: www.fhfa.gov/coronavirus
Additionally, Fannie Mae and Freddie Mac have their own dedicated webpages for homeowners, with online tools for determining if your mortgage is owned by Fannie Mae or Freddie Mac:
What Your Loan Servicer Must Do If You Request Forbearance
If you’re having trouble making payments on your federally backed mortgage because of the COVID-19 pandemic, contact your loan servicer before September 30, 2021. Your loan servicer must:
Defer or reduce your payments for 180 days if you contact them to make arrangements
Give you another 180 days of mortgage relief at your request
Offer options for how you can make up the deferred or reduced payments. They will discuss these options with you at the end of your forbearance period.
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Organizations That Provide Mortgage Help
Receive mortgage advice and foreclosure prevention counseling from The Alliance for Stabilizing our Communities . The organization was created from a partnership from the National Urban League , the National Coalition of Asian Pacific American Community Development and the National Council of La Raza .
Catholic Charities also runs a number of free foreclosure counseling programs. They have locations across the nation, and case managers at many centers specialize in dealing with housing issues, including mortgage delinquency and providing more general homebuyer assistance. The services also deal with overall credit counseling and repair. All services are free to qualified families, and locations are approved and certified by HUD. Read more on Catholic Charities free housing counseling.
The Cherokee Nation offers resources and guidance to assist homeowners and help them prevent a home foreclosure. Solutions are focused on Native Americans across the country, as the Cherokee Nation mortgage program helps thousands of Native Americans.
There are thousands of non-profit housing counseling agencies that are certified by the U.S. Department of Housing and Urban Development . Counselors will work with homeowners to help them prevent a foreclosure or get back on track with paying their mortgage. Most of the services are free for struggling homeowners. Get more details on HUD housing counseling agencies.
Will Forbearance Impact My Credit Score
Mortgage forbearance is a postponement of obligations, which should not damage borrowers credit scores even if loan servicers continue to report the status of the mortgage to credit bureaus. Any missed payments before the start of the forbearance period, however, do weigh down credit scores. However, keep an eye on your credit. Its a good idea to routinely check your credit reports in order to make sure there are no errors or inaccuracies. If you stop making mortgage payments without a forbearance agreement, the servicer will report this information to the credit reporting companies, and it can have a lasting negative impact on your credit history. If an error has been made, however, you can work to dispute it. More information is available about protecting your credit during the coronavirus pandemic.
While suspending mortgage payments avoids delinquency in the eyes of credit reporting agencies, it does count as a gap in payment from an underwriting standpoint. One potential impact is a temporary inability to refinance a home loan or obtain a new mortgage.
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