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Homeowner Loan Options Amid COVID-19 Financial Uncertainty

The financial uncertainty COVID-19 has ushered in is certainly a cause for concern. And for homeowners, this is especially true. Homeowners are worried about covering mortgage payments, or having money to make much needed repairs they may have been putting off until the winter months passed.

Unfortunately, this may not be in the cards for homeowners as coronavirus continues to threaten job security and economic growth. How can homeowners pay mortgage payments on time and/or make needed fixes to their home? President Trump has moved forward with delaying mortgage payments. But this only applies for government loans via HUD

The good news is that you are not alone. And there are a number of homeowner loan options. To help homeowners get the information they need amid COVID-19 financial uncertainty, we compiled a list of loan options. Let’s take a close look!

Reverse Mortgages May Provide Financial Support

Reverse mortgages can be a good route to cover mortgage payments, car payments, or other bills if you are under financial stress. You can actually check out how much you could receive online with a useful calculator for reverse mortgages. You also may need a bit more information about reverse mortgages too.

Reverse mortgages are simply a secured loan from your home. You can receive money via part of your home’s equity, and without needing to pay taxes on the money received. You also may not need to pay mortgage payments until you sell your home and move. 

You could qualify for around 50 percent of your home’s value, making it a worthwhile homeowner option during these troubling times.

Check Out Home Equity Loans

Another homeowner loan option amid COVID-19 financial uncertainty is the home equity loan. Home equity loans are a great way to get cash from the equity of your home without refinancing your home or taking out a line of credit against your house. This loan option allows you to receive a nice chunk of cash to pay mortgage payments, make needed improvements on your home, and more.

This is one of the best options, rather than refinancing your home. However, refinancing your home may be a good option right now, since percentages are as low as zero percent! And if you are in your first home, interest rates may be higher when taking out a home equity loan. Do your research to see if home equity loans are right for you.

Refinance Your Home To Decrease Monthly Payments

Home loan options also include not actually getting a loan, or lump sum of money. This is where mortgage refinancing comes into play. By refinancing your home, you can decrease your mortgage payments, since you will be getting a lower interest rate on your mortgage loan. 

As mentioned above, right now may be a good time to do this. The government is lowering interest rates to zero, making it a great time to refinance. However, this will not give you a surge of cash flow to cover other bills. Sure your home payments will be lower, but you may need cash via a loan to cover other bills during these uncertain financial times.

A Home Equity Line Of Credit May Work For You

One way to get the money you need to pay mortgage payments, car payments, make needed home improvements, and more is a home equity line of credit. It may not be the best option, but for many, it could be very beneficial. What is a home equity line of credit?

A home equity line of credit is a loan option that does not go toward your original mortgage loan. This separates it from home refinancing. Instead, homeowners could get up to 80 percent of their home’s value in the form of a credit line. This is beneficial, because you don’t get a lump sum of cash, and don’t need to pay interest on that lump sum. 

You will need to set up payment terms and a payment schedule for a home equity line of credit with your lender. And you generally only get about 10 years to draw from the credit line funds.

Are You Looking For Financial Help?

If you are experiencing financial strain due to the coronavirus pandemic, you are not alone and you do have options. Homeowners have a wide range of loan options available. The above homeowner loan options are only the tip of the iceberg. But you should definitely contact your lender first and see if they are willing to work with you before taking a loan out to cover mortgage payments.


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Homeowner Loan Options Amid COVID-19 Financial Uncertainty

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