As the world continues to navigate a new normal while COVID-19 disrupts almost every aspect of our lives, homeowners across the country are experiencing challenges both financially and emotionally during this unprecedented time. Even though much remains unknown during this pandemic, we’re here to demystify the rampant rumors about your mortgage and hopefully ease your mind.
Here are our answers to some of the top myths circulating:
Myth: Mortgage payments will be pardoned
Unfortunately, no mortgage provider can eliminate your mortgage payments but there is some good news — mortgage relief is available. Forbearance allows you to temporarily suspend your mortgage payments for up to 12 months. The duration of your forbearance period is flexible depending on your circumstances— we’ll generally encourage you to begin with a shorter period and extend into a longer length if necessary. If you’re experiencing financial hardship and are considering forbearance, contact your mortgage provider before you miss a payment. Ensuring you have a plan in place to handle these changes can help. Don’t know how to start the conversation? Here’s how to talk to your lender.
Myth: You’ll owe one lump sum at the end of your forbearance period
This isn’t necessarily the case at all. About 30 days before the end of your agreed-upon forbearance period, you should contact your mortgage provider to discuss manageable solutions and different payment plans that may be available.
Myth: There is a universal payment plan you’ll need to follow
No two financial situations are identical; therefore, no two payment plans will be. PrimeLending is committed to helping you determine which payment cadence works best for you by offering several options. Some of these potential payment solutions include reinstatement, or one full payment, repayment plans that couple a portion of your forbearance amount with your normal mortgage payment or even modifying the loan to change the terms. You should speak with your mortgage provider as soon as you can to discuss terms for your specific situation.
Myth: You need to be unemployed to apply for forbearance
Anyone can apply for forbearance. However, we strongly encourage to only apply if you’re absolutely unable to keep up with your current mortgage. By prolonging this decision, you give yourself the option of forbearance in the upcoming month’s when this assistance may be needed most.
Myth: Forbearance will negatively impact your credit score
Forbearance will not negatively impact your credit score. However, it’s important to continue to make payments until the formal, written agreement is in place to avoid a drop in your credit score.
If you’re still looking for answers during these challenging times, please contact a PrimeLending loan officer — we remain a virtual resource and can facilitate the home loan process with our digital tools such as Loanplicity℠ and eClose.