Blog posted On April 01, 2020
The coronavirus (Covid-19) pandemic has led to travel slowdowns, shutdowns of gyms, restaurants, churches, and other gathering spaces, amid a global economic slowdown. Millions of American households will likely feel the financial strain from temporary or permanent job loss, investment uncertainty, and other economic pressures. In times of economic stress, many families may be wondering what to do if they are unable to make a mortgage or rent payment.
If you own your home:
Talk with your loan servicer.
Your loan servicer is the institution that holds your mortgage and where you send your payments every month. Your loan servicer may be different than the mortgage lender you worked with when you got your mortgage. If you don’t know who your loan servicer is, contact your loan officer or look at your most recent mortgage statement.
Talk with your bank or credit union.
Some banks and credit unions offer hardship programs to clients. Call your bank or credit union before your mortgage payment is due and let them know about your situation. You may also be able to apply for a personal loan. Personal loans typically have lower interest rates than credit cards and may be a better option to temporarily cover expenses.
Consider putting your loan in forbearance.
If you don’t have any other options, you can put your loan in forbearance, a hardship option that postpones your mortgage payment. Be aware that although you won’t be making payments, you’ll still be accruing interest. Before you choose this option talk with your mortgage lender and see what terms they can offer you. Terms will vary depending on your loan repayment history and other financial factors.
If you rent your home:
Let your landlord know immediately.
The sooner you notify your landlord the better. Don’t wait until the rent is due. Being transparent about your situation will allow you both to work out the best course of action.
Make a payment plan in writing.
Some landlords may be willing to accept partial payments, at least temporarily, if you have previously paid your rent in full and on time. If you work out a payment plan with your landlord be sure to get everything in writing.
Research outside assistance.
In times of financial hardship, it’s important to research outside assistance. In some cases, government help may be available. You can also talk with your bank or credit union about financial hardship programs or look into a personal loan. A personal loan typically carries a lower interest rate than a credit card and can be beneficial for temporary financial relief.
Many American families across the country may experience financial hardship due to coronavirus shutdowns and slowdowns. During this time, it’s important to stay informed and stay in touch with your financial institutions. If you find yourself unable to make a mortgage or rent payment, contact your loan servicer or landlord first before you miss your payment.