With millions out of work and millions of paychecks being slash due to the COVID-19 pandemic, many of these individuals are unable to pay their mortgages for months to come.
7 Ways to Deal with Bad Mortgage in Lexington, NY
You should seek help now if you’re behind on mortgage payments for your Lexington, KY home due to the pandemic or for any other reason. If you’re behind on your mortgage, here are seven solutions you can try.
Forbearance
A forbearance is a temporary suspension of your mortgage payment. Once the suspension or reduction period ends, you agree to pay in a lump sum or through installments. During the period of forbearance, the record shows that you are current on your mortgage.
Servicers don’t have to deal with underwriting or much work. In the long run, however, you’ll end up paying more interest.
Payment by installments or in a lump sum
Depending on the servicer, homeowners may be able to make overdue payments after their financial situation improves. A repayment plan allows you to make your regular payments plus a little extra to make up for the late payments. Servicers must be convinced that your financial situation has improved enough to enable you to handle a larger monthly payment.
For homeowners who are in good standing with their finances and can handle a larger monthly payment, this may be a viable option. By paying back the mortgage payments in a lump sum, the servicer brings your account current and reinstates your loan. The total may go up, however, due to fees.
Loan modification or refinance
Refinancing is almost the same as modifying a loan. The term of your new loan is longer or the interest rate is lower.
It is vital that you convince your loan servicers that you have overcome your financial difficulties. There are typically some criteria you must meet, such as proving a financial or personal hardship.
Same mortgage, lower associated payments
There is also the option of reducing the costs associated with home ownership. A great way to reduce your monthly home-related costs is to shop around for a lower price on your property insurance. Another option would be to find out if your area offers property tax abatements.
You can also end your private mortgage insurance (PMI) in order to free yourself from this cost. Depending on your home’s equity, this may be possible. Many homeowners let this payment go on longer than they should. You may be motivated to eliminate it by your financial problems if you have not already done so.
Principal reduction
Depending on the underwriting and the actual value of your home, your servicer may be able to lower your loan’s principal. By reducing your loan balance, you can lower your monthly payments.
For this option to work, you need the numbers to work, since services and lenders need protection. You should ask your lender or servicer if your lender or servicer offers principal reductions.
Local resources
There are some areas where struggling homeowners have access to a wealth of resources. The Kentucky Homeowner Assistance Fund is an example of a resource available in Kentucky. The fund may assist you with your mortgage and housing-related expenses so that you can avoid foreclosure.
Selling your home
You might not be able to pay for your home in the long run, so selling your home might be the last resort. If you want to start over, you might also want to consider selling your house.
Usually, homeowners hire real estate agents to sell their properties. This might not be the best option, especially if you are behind on payments and need the money to start over. You can sell your house without having to remodel your home or pay commissions and other fees to many cash home buyers who can give you the cash upfront.
Are You Looking to Sell Your Lexington, KY House Fast?
Sell your home quickly to start over. At Rylo Homes, we buy houses in Lexington, KY to help you make money without having to pay commissions or fees.
Homeowners just like you who want to sell their house fast have been working with us for years. We make selling your home for cash easy with a simple process.
Find out how much cash your home is worth by calling (502) 317-8553 today.
