We can only guess how many of you may have attempted to contact your mortgage companies regarding your payment, only to get a busy signal or if you are lucky, a six hour hold time. If you are not able to get a hold of your mortgage company, go to their website to see what information they are offering. Before agreeing to any help from them, make sure you understand the details of what you are agreeing too.
As of now, we are are seeing is the following:
- Some banks are allowing their customers to only make the principal payment, yet the customer still needs to make the interest payment. What does this mean? This means that although you either lost your job or had a large reduction of pay, you still need to pay the majority of your promised monthly payment. Depending on when you took your mortgage out, the majority of your payment IS interest. You still need to pay on average ¾ of the payment amount.
- Some banks who offer a 3 month deferment are actually a three month “balloon” payment. The three month deferment as we know it used to mean the 3 payments are added to the back of the loan. THIS three month deferment is a balloon which you, the borrower, need to come up with the full three months payments… in three months, in addition to your forth payment. If your mortgage company offers this to you, make sure you ask the appropriate questions:
- What are the exact terms?
- Are the deferred payments tied to the back of the loan or set up as a balloon payment due after 3-months?
- Will this affect your credit?
We will continue monitoring this and post any new updates. Remember, stay safe and please do not make any rash decisions before knowing your facts. Also, make sure whatever you are told, make sure it is in writing.
We will all get through this COVID-19. Stay strong and informed.