Mortgage payments are one of the largest expenses that most homeowners include in their budget. As part of the home buying process, buyers spend a large amount of time figuring out how much of a mortgage payment they can afford.
Your decision to get a VA loan was based upon the facts that you had at the time. The possibility of being laid off might have been the furthest thing from your mind.
As unemployment rates rise, lenders are willing to work with borrowers who are open to discussing their situation. Taking action as soon as you know about the layoff helps you maintain the security of owning a home.
Assess Your Current Financial Resources
There are several financial options that might be available to help you stay afloat. If you are eligible for unemployment insurance, then it is important to file right away.
You might also have a savings account that you can use temporarily to meet your expenses. Some people may have additional income from investments that can be put toward the payments.
Community organizations have programs to help with food, shelter, and other essential needs. Temporarily using this type of assistance helps with stretching your budget.
Look for Ways to Increase Your Income
Part-time jobs and side gigs can help boost your finances. You might also have items around your house that you no longer need. Now may be the ideal time to hold a garage sale or get rid of that old car while it still runs.
Cut Unnecessary Spending
Temporarily cutting out subscription services can save hundreds of dollars a year. There may also be areas where you can scale back. Look over your cable and cell phone bills for extra services that you don’t use. These can always be added back when you go back to work.
Make the Mortgage Payments for as Long as Possible
It is sometimes tempting to immediately stop making payments when you feel the stress of losing your job. Continuing to make your house payments for as long as you can help you to avoid owing more later on.
Reach Out to the Lender for Assistance
Mortgage lenders are willing to work with borrowers who are dealing with financial hardship. Currently, the CARES act requires lenders to allow borrowers with a federal government-backed loan to have a mortgage forbearance of up to six months. During this time, you may be able to skip making payments. You could also make smaller ones.
VA Loan Payment Assistance
VA Loan Payment Assistance refers to a variety of programs and resources offered by the U.S. Department of Veterans Affairs (VA) to help eligible veterans and service members facing financial hardship make their mortgage payments. These programs can provide temporary relief or long-term solutions, depending on the specific needs of the borrower.
Here are some of the most common types of VA Loan Payment Assistance:
- VA Loan Forbearance: This program allows borrowers to temporarily reduce or pause their mortgage payments for a set period, typically 3-12 months. This can provide much-needed relief during times of unemployment, illness, or other financial hardship.
- VA Loan Modification: This program allows borrowers to permanently change the terms of their mortgage loan, such as the interest rate, loan term, or principal balance. This can make the loan more affordable in the long run.
- VA Specially Adapted Housing (SAH) Grant: This grant program provides financial assistance to veterans with disabilities who need to modify their homes to make them more accessible.
- VA Homeowners Assistance Fund (HAF): This fund provides grants to eligible veterans who are at risk of foreclosure. The grants can be used to catch up on missed mortgage payments, property taxes, or homeowner’s insurance.
What is Forbearance?
Forbearance allows you to temporarily reduce or pause your mortgage payments for a set period. This breathing room gives you time to get back on your feet without risking foreclosure.
Why is forbearance relevant to VA loans?
VA loans are backed by the government, which gives lenders more flexibility to work with borrowers facing difficulties. Jimmy Vercellino, as a top VA lender and real estate instructor, emphasizes the importance of being proactive. When faced with a financial setback like a layoff, communicating with your lender is key. Don’t wait until you’re behind on payments – the sooner you reach out, the more options you’ll have.
Benefits of VA Forbearance:
- Avoid foreclosure: This is the primary goal, allowing you to keep your home even during temporary hardship.
- Reduced financial stress: Lowering or pausing payments frees up cash for other essential expenses.
- Time to recover: You have a grace period to find new employment or adjust your budget without immediate pressure.
- Lender support: VA encourages lenders to work with borrowers and find the best solution for each situation.
Develop a Plan for Repayment
A mortgage forbearance doesn’t mean that the debt goes away. When you create your agreement, make sure to ask the lender how the additional debt must be repaid. Knowing whether you need to make a lump-sum payment or can spread it out over several months helps you plan for the day when you are ready to pay again.
Finding ways to cope with the unexpected is a sign of resilience. A layoff is one life event that does not have to ruin your financial standing or status as a homeowner. There are options out there to help you manage your mortgage payments during this challenging time. Make sure to take advantage of them, and you can look forward to being in the best possible financial shape when you go back to work.
How a VA Home Loan Originator Can Help
Don’t wait until you’re behind on payments. Jimmy Vercellino, one of the country’s top VA Home Loan mortgage originators, is proactive and believes in early intervention. The sooner you seek his guidance, the more options you’ll have and the greater your chances of overcoming this hurdle.
Here’s why you should look for him:
- Knowledge is Power: He possesses in-depth knowledge of VA loan programs specifically designed to help veterans facing hardship.
- Expert Guidance: He’ll navigate the complexities of some programs with you, explaining your options and helping you choose the best solution for your specific situation.
- Advocacy and Support: He’ll act as your advocate with your lender, ensuring you receive fair treatment and understanding under your VA loan benefits.
- Personalized Planning: He’ll help you create a realistic budget and financial plan to manage your expenses during this challenging time.
- Peace of Mind: Knowing you have a dedicated professional in your corner can significantly reduce stress and allow you to focus on finding a new job.
