Owning a home is the American dream. However, many people are barely holding on to their dream. As the economic effects of the pandemic drag on, a growing number of homeowners are struggling to pay their mortgage.
The process of saving your home is extremely complicated and not something you should do on your own. The good news: There’s free help to walk you through the process.
Steps to save your home
First, contact your lender to understand your options. In most cases, it’s usually a loan modification or forbearance.
Loan modification will lower your monthly payment, but it could affect the amount of interest you’ll pay. To qualify, you must either be delinquent or facing imminent default, like losing your job.
Forbearance is when your lender temporarily allows you to pay less each month or pause paying your mortgage. It does not erase the amount you owe; you will have to repay any missed or reduced payments.
Once you know your options, contact a HUD-approved counseling agency to get free help.
There is no income requirement to get help from a HUD counselor and they will walk you through the entire process.
“We are qualified and trained so we know exactly what documents they’re gonna ask for so we ask for those in advance so that we can build a packet and submit those to the lender,” said Sha’ri Williams, a HUD-approved counselor.
Williams says now more than ever, lenders want to work with homeowners to avoid foreclosure.
One other tip: Don’t pay anyone who says they can save your home from foreclosure.
Depending on where you live, or if you have a federally-backed mortgage, you may have some extra protections in place during the pandemic. Click the links below to learn more.