Recently the question of whether there is assistance available to homeowners who may be current on their mortgage payments has arisen, and some homeowners feel this topic needs to be addressed in a little more detail as there are those who are facing financial hardships but have yet to default or even miss a mortgage payment. Understandably, it’s always better to take preventative measures on any kind of financial problems, be they a home loan payment or credit card debt, but some homeowners are simply worried about what may become of their situation if they do not get help at the present time and end up becoming delinquent.
While it will depend on the severity of a homeowner’s position, their financial history and credit score, or even certain financial abilities to meet requirements of options that are available, there are indeed routes for assistance that could be potentially helpful for homeowners even if they are current on their mortgage. First, homeowners usually look to options like the home loan modification plan, as the federal Making Home Affordable Program has been one of the more widely used options homeowners have turned to when it comes to finding a lower monthly mortgage payment.
Yet, this option may depend on a homeowner’s mortgage servicer as to whether it will be available, since some of the requirements for eligibility do state that homeowners must have a mortgage payment that is more than 31% of their income and have documented financial hardships that could put them in danger of falling behind on their mortgage. Some homeowners have reported that their bank was unwilling to offer a modification while they were able to make their mortgage payment, so this could lead to a homeowner needing to speak without an outside resource. Obviously, missing payments can do damage to a homeowner’s credit score, so housing counseling assistance from the HOPE Hotline has been used by homeowners to explore options that may be available so that they can avoid falling behind on their mortgage payment.
There is, also, the traditional option of simply refinancing a home loan as interest rates are incredibly low at the present time and for homeowners in a good financial position, this has been one way they have gained some affordability during financially strained times. Obviously, there are closing costs to consider, the ability of a homeowner to get a lower rate that will make these costs worthwhile or even bring a lower mortgage payment, but homeowners must also understand that if they are not in a good financial position, a lower interest rate at the time of refinancing may simply not be available or higher costs that may be due at closing cannot be met.
With certain programs though, avoiding foreclosure or delinquency is usually the main goal, so homeowners who may be unemployed and fear they may fall behind on their mortgage payment might be able to explore not only federal opportunities for unemployment assistance but state-specific plans as well. What homeowners must be able to document is their financial hardship, like a reduction in wages or proof that one of the primary income earners in the household has been unemployed, before any assistance may be given.
If homeowners are simply having financial trouble but factors like unemployment or other hardships are not present, simply talking with a nonprofit credit counseling agency may be the best route, as this situation could point to a homeowner mismanaging their finances and being in need of an overhaul. While a homeowner’s financial position and the severity of their predicament will dictate which of these options may be helpful or available, the first step that homeowners must take is to begin exploring these resources so that they can find a solution before they can no longer make payments on their mortgage.