Your financial situation may have changed in the past couple of months, and you may be worried about making your monthly mortgage payment. The good news is that new options could be available to you, particularly if your mortgage is backed by a federal agency. These options are provided by the CARES Act, which was signed into law in late March. It primarily garnered attention for its direct stimulus payments to Americans, but it also contains provisions for mortgage relief.
The main provision which applies to VA loans and other federally-backed loans is a forbearance period. Forbearance means that the loan servicer will temporarily accept a lower payment amount, or no payment at all. Interest will continue to accumulate, and the full payment will be due eventually, but it does provide a break that might help you out until your finances improve. The CARES Act includes a 180-day initial forbearance period, and then an additional 180-day period for people who still need help.
There is also a foreclosure and eviction moratorium for federally-backed loans that is currently scheduled to run until June 30, 2020.
If your loan is not federally backed, the CARES Act provisions do not apply. However, the Consumer Financial Protection Bureau and other federal agencies have encouraged loan servicers to work with homeowners to provide mortgage relief options, so your first step should be to contact your loan servicer. They may offer a loan modification — lower payments in exchange for a longer term, for example — or a plan for deferring payments.
Whether you have a federally-backed loan or another loan type, it’s worth seeing if you might be able to lower your monthly payment by refinancing your mortgage. There are many websites online that work with various lenders which allow you to review refinancing quotes from multiple lenders. You can then compare them with each other and with your current loan terms to make the best decision for your financial needs.