Many North County San Diego homeowners have gotten some financial relief during the pandemic through mortgage forbearance. The CARES Act has allowed homeowners with federally-backed mortgages to postpone paying on their home loans during this challenging time. But forbearance doesn’t last forever, and those loan payments will come due again. So what are your options when your loan forbearance ends?
Speak with your lender
The most important thing to do when your forbearance is scheduled to end is to speak with your lender. The options available to you will be based on your forbearance agreement, which can be different from one lender to another. By talking to your lender, you will know exactly what options are available to you. Contact them early so that you have time to decide the best route for your unique situation.
Ask about an extension
The CARES Act allows for up to 360 days of mortgage forbearance. If you’re still having difficulty making your mortgage payments, then ask your lender for an extension. But don’t just stop making payments before talking with your lender. Though it’s easy to get an extension, you need to have confirmation. Otherwise, your credit score will take a big hit for those late payments.
If you’re in a position to resume payments but you’d like to save some money, then consider refinancing. Mortgage interest rates have hit record lows. You could score a loan for as little as three percent – possibly even lower if you have excellent credit. But refinancing is only a good option for those who intend to stay in their homes for the long haul. If you’re planning to move soon, then refinancing is not the best option. You will incur closing costs that could amount to six percent of the loan amount, which only makes sense if you’re staying for several more years.
Negotiate a modification
Another possibility is negotiating a loan modification with your lender. This allows you to adjust the terms of your loan, such as the length or the monthly payments. Loan modifications are a good choice for homeowners who are at risk of default and have fewer options. This is because a loan modification can lower your credit score. Be aware there are also fees associated with modifying your existing loan.
List your home
Did you know that now is an excellent time to sell your North County San Diego home? The real estate market is hot right now. The combination of low interest rates and a shortage of inventory means it is a sellers’ market. If you have equity in your home, selling can provide you with a good return on your investment. Click here to find out what your home is worth in less than 35 seconds.
Foreclose as a last resort
Some homeowners may not be in a position to take advantage of any of the options above. In cases like these, your best option may be to foreclose.
Contact the Clark & Gilman Team
Are you ready to buy or sell a North County San Diego home? Then contact the experts at the Cristine Clark & Jamie Gilman Team at 760-758-1211 or [email protected]. We’ve been helping people buy and sell in North County for years, and we’d love to help you achieve your real estate goals.