Did Your Mortgage Forbearance End?
If you applied for a mortgage forbearance earlier this year and it has now ended, or is due to end, you will need to make a decision. That money could be due now in one lump sum, depending on the terms of your forbearance. Some lenders are allowing you to apply for a second forbearance.
If you are not in a position to pay back all the past due payments in one lump sum, then you will need to think about what your next steps will be. Selling? Renting out your home? Possibly refinancing?
During the big mortgage meltdown in the early 2000’s, many people faced foreclosure and short-sales dominated our real estate market. At that time, due to a variety of different factors from investor purchase speculation to poorly structured mortgage loans, many homeowners were in dire straits.
The option of selling was tough. Many of these struggling homeowners did not have any equity in their home and selling would mean enduring a lengthy short-sale process. Refinancing most often was out of the question because there was little to no equity in the home and the homeowner’s credit played a role, as well.
Renting could possibly work if the rental amount could help to cover most or all of the mortgage payment. But if the homeowner had an adjustable rate mortgage that had caused their payment to skyrocket out of control, going this route would have been less than ideal.
Not the same this time around
Fast forward to today. Our home values have increased steadily for the past few years. Rental rates are some of the highest that they have ever been in the Phoenix area. Meaning that the option to rent out the home and have the rent cover the mortgage payment is a very viable option.
Also, depending on the homeowenr’s credit, refinancing may be the way to go right now because interest rates are historically low. Of course, selling is still an option. And given the increase in home values, a homeowner may be able to sell and cash out their equity. These would be funds that they can use to move on to the next chapter of their lives.
Whatever path you choose to take, you will have to make a decision and communicate that with your mortgage lender. If you are not able to make those payments because of COVID related reasons, let them know. Share your plans with them, the lender simply wants to know how you will continue to pay the mortgage. They would rather not have to initiate a foreclosure process and have you lose your home. There are options out there and people like myself that can help you.
Are you considering selling your home? Give us a call, we can provide you with a free estimate of what you can expect to receive once all professional, title and escrow, and loan fees are paid, 602-391-8986.