Mortgage Assistance For The Unemployed
Unemployment is sometimes unavoidable. While it has a negative impact on anyone who experiences it, homeowners are presented with a unique problem: paying their mortgage. However, there are two very important ways you can get help with your mortgage while you are unemployed.
In times of hardship, loan servicers will often agree to modify your home loan. They will either change your interest rate, outstanding balance, or number of payments. Two HUD sponsored programs help households with these mortgage modifications.
- Home Affordable Unemployment Program
Known as HAMP, the Home Affordable Unemployment Program gets unemployed homeowners a reduction in their mortgage payments. The reduction is lowered to less than 31% of your gross income. To qualify, applicants must be unemployed and eligible for unemployment benefits. The home must be the primary residence with no previous mortgage modification under the Home Affordable Unemployment Program. To apply, verify that your mortgage servicer participates in the program and then speak to an approved housing counselor at 888-995-HOPE.
- Hardest Hit Fund
Unfortunately, this program is only available in states that have been most affected by the housing crisis. These states include California, Nevada, Arizona, Oregon, Michigan, Illinois, Indiana, Ohio, New Jersey, Rhode Island, Kentucky, Tennessee, South Carolina, North Carolina, Mississippi, Alabama, Georgia, and Florida. They offer various types of mortgage assistant but the two most important services are principal reductions and elimination of second lien loans. The program is run through the above states. For more information regarding eligibility and how to apply visit HHF State-By-State Information.
Getting a forbearance of your mortgage temporarily reduces or suspends your payments for an agreed upon time. At the end of this period, your payments resume with the addition of a lump sum or partial payments to bring your loan status to current. A forbearance is mainly for unemployed individuals who intend to return to work.
The process of obtaining mortgage assistance should be started as soon as you know you will need help. Waiting until your mortgage payment is due, or nearly due, you could be disqualified or required to pay a penalty. This is also something to take into consideration if you plan to give up your home instead.