Covid 19/ Coronavirus Information
The 4 biggest government lending institutions have all provided guidance on how they will help home owners and provide relief in the event that your employment or income is reduced due to the Covid 19/ Coronavirus National Emergency. Links to information for Fannie Mae, Freddie Mac, FHA, and VA are listed below. You may be eligible to receive forbearance if you are unable to make your payments due to COVID-19 related issues. If you are in an urgent situation it is critically important that you contact your mortgage servicer (The company you make payments to) to arrange to not make a payment. It is important that you do not just stop paying as your loan could move into default. You must notify the servicer and make an arrangement before you are 30 days late on your payment.
The forbearance could come with some potentially negative side effects :
- Your credit score may go down due to the absence of a mortgage payment on the loan. The credit report will not show that you are late but it will indicate a forbearance and the absence of the positive monthly payments could affect scores .
- After a forbearance is completed you would typically have to make 12 on time payments before you could qualify for any future mortgage loans. Both for refinancing and purchasing. So if you are thinking of doing this but don’t really need to then you should consider this consequence.
- The mortgage payments and the interest are transferred to the back of the loan typically but you must also be aware that the portion of the payment that you normally pay towards taxes and insurance are being paid by your servicer during forbearance so you will often have a shortage to make up on these items down the road.
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