Mortgage Assistance Options to Help You Avoid Foreclosure
If you’re struggling financially, you make be able to get mortgage assistance to help prevent or stop your home from ending up in foreclosure.
Life happens, finances change, and what was once an affordable mortgage payment may no longer be feasible. When that happens, it can be helpful to look for mortgage relief programs that can help fill in the financial gaps and/or offer targeted solutions that ensure that you are able to stay in your home.
The specific mortgage assistance programs that are available to you will depend on where you live (many counties and states operate their own programs), as well as whether or not you qualify. We’ve put together this quick overview of what your options might be, and we also recommend reaching out to Department of Housing’s Homeowner Help line at (888) 995-HOPE (4673), where you will be connected with someone who will be able to assist you in navigating your unique financial situation.
What are your mortgage assistance options?
There are a number of general places to start your search when you are in need of mortgage assistance, including government programs, mortgage refinancing programs, property tax help programs, foreclosure mediation programs, and charities.
Government programs – These are mortgage relief programs facilitated by either your state or your local government (and sometimes both). Various services that may be available include free counseling and grants, assistance with paying or refinancing your mortgage payment, or help securing a new and more affordable mortgage loan. At this time, there are also federal mortgage assistance programs for those facing hardships due to the COVID-19 pandemic. Visit the Federal Housing Finance Agency to learn more.
Mortgage refinancing programs – Refinancing your mortgage may allow you to secure lower monthly payments that are more in line with your current financial situation. Examples include the Home Affordable Refinance Program (HARP), a federally funded program that works with homeowners who have little or no equity in their homes to restructure their payments under lower interest rates.
Property tax help – Property taxes are a major homeowner expense, and can add hundreds of dollars onto your monthly mortgage payment. And getting property tax help—either through a reassessment to potentially lower your rates or by entering into a property tax installment plan—could make a difference in your ability to stay on track. Call up your county government office to discuss what your options are and see if property tax help might be available for you.
Foreclosure mediation programs – Foreclosure mediation is a process by which your local court system works with you and your lender to hopefully facilitate a mortgage solution that keeps your home out of foreclosure. In most cases, you’ll be provided with a low cost or pro bono attorney, counselor, or mediator who can help you explore all of your potential options and find an agreement that works for both you and your bank.
Charities – There are also some national charities that might be able to help, such as the Saint Vincent de Paul Society and United Way, and you may have local charities in your area that can provide assistance as well. Another charitable option is to work with charities who can help you out in other ways, such as food pantries that can offset your cost of groceries so that you have more money to set aside for your mortgage payment. (Note that some food pantries do offer baby and pet food as well, just be sure to call and ask about availability ahead of time since those types of items may be in shorter supply.)
Your local or state government may also offer other organizations that are worth reaching out to if you need help with mortgage payments, including those that specialize in mortgage assistance for seniors, veterans, and those who are currently collecting unemployment. There are also often programs that will work with those currently undergoing foreclosures or short sales transition into stable short term housing.
Bank mortgage relief programs
In addition to more general mortgage assistance programs, many lenders—including big ones like Bank of America, Citibank, JP Morgan, and Wells Fargo—have their own mortgage assistance programs for borrowers who qualify.
Any time that you are worried you may not be able to make your monthly payment, it’s better to call your lender sooner rather than later and find out what your possible solutions are. There are various bank-funded foreclosure prevention programs, and depending on your individual situation, you may be eligible for assistance that will allow you to lower your monthly payment, freeze your payments temporarily, or get an interest rate reduction.
When you call, ask about other resources too, such as free counseling services. Lenders have a vested interest in ensuring that you are able to make your mortgage payments, and will often offer temporary assistance of some sort if it means avoiding a foreclosure.
Again, you’ll want to get in touch as early as possible, and ideally before you have gotten behind on payments. This shows that you are taking proactive steps to remedy the situation, and that you are open to working with your lender on potential solutions.
How to qualify for mortgage assistance
Whether or not you qualify for mortgage assistance will vary by program. For example, some programs will require that you still have enough income to make lower monthly payments, while others will work with you regardless of whether you are currently able to make any payments at all. Likewise, some programs may have credit or equity requirements, while others will not.
The best way to find out if you are eligible for mortgage assistance is to reach out to programs directly. This is an important first step in getting the help that you need, and even if you do not qualify for one program they may be able to point you in the direction of others who can help.
Tips on preventing a foreclosure
Facing a foreclosure can be a scary and overwhelming experience. Here are some ways to hopefully prevent a foreclosure on your home from occurring:
Don’t let the problem linger. Contact your lender as soon as you realize that you may have trouble making a mortgage payment. The sooner the better, especially when it comes to securing solutions that will help you pay.
Don’t ignore the problem. In the same vein, ignoring mortgage issues won’t make them disappear. Keep the lines of communication open instead of just assuming that your financial situation will clear up on its own.
Know what your rights are. Understand what possible next steps are and what your rights are as a homeowner by looking at your mortgage agreement as well as at your local and state laws around foreclosures. This will give you an idea of timing, as well as what’s expected of you if payments are going to be a problem.
Contact the HUD. As mentioned previously, the Department of Housing (HUD) offers a Homeowner Help line at (888) 995-HOPE (4673) that is a great first place to start when you are researching your mortgage assistance options.
Change how you spend. Are you able to shift around your spending so that you have more money to put toward your housing costs? Examples include cutting down on costs related to entertainment or dining out, or even selling your existing car and purchasing a more affordable alternative.
Look into mortgage refinancing. Consider refinancing your mortgage if possible (and if interest rates are favorable). This can go a long way toward lowering your monthly payments. If a straight refinancing isn’t an option, you could also look into getting a home equity line of credit (HELOC) to help offset your current costs.
Know that there are options available to you if you are in need of help paying your mortgage. Find out what you qualify for, and connect with a counselor to discover ways that you can work within your current finances to relieve the payment burden and stay out of foreclosure.
As you do your research, make sure to keep an eye out for potential scams. There may be for-profit companies that reach out to you and offer to help you restructure your payments or otherwise avoid foreclosure for a fee, but many of these are just predatory and will not offer actual help. Stick to the free or low-cost support options mentioned in this article, and don’t pay any company for a miracle fix—especially if it means paying out money that takes you further away from being able to make your mortgage payments.
Written by: Laura Mueller for Moving.com