The financial burden left behind after a hurricane can be devastating, and mortgage payments can be hard to make when you’re struggling to recover from the aftermath. If you cannot meet your mortgage payments, you can take advantage of a few relief options from your mortgage provider.
Here, we’ll take a look at mortgage forbearance options for homeowners affected by hurricanes, what happens after forbearance, your eligibility, and how to get started on your mortgage forbearance.
Mortgage Forbearance Options Available For Homeowners In Florida
Following the impact of hurricanes in Florida, big mortgage companies Freddie Mac, Fannie Mae and the Federal Housing Administration have always ensured to extend forbearance to affected homeowners as they recover. Mortgage forbearance allows holders of mortgage loans short-term relief while prioritizing their safety. All you have to do is reach out to your servicer via the contact on your mortgage statement.
In addition, mortgage forbearance can extend relief to homeowners for up to twelve months without incurring late fees and penalties. As a homeowner, you can:
Pause Your Payments
Mortgage forbearance allows you to pause your payments temporarily until you get back up. If your financial situation doesn’t improve after your initial forbearance, you can still ask your servicer to extend your forbearance period.
Remember that your servicer won’t automatically extend your forbearance period without asking them to do so. Once your mortgage forbearance ends, talk to your servicer as soon as possible. If you don’t, you’ll risk foreclosure and other penalty charges.
Reduce Your Mortgage Payments
Ask your mortgage provider to reduce your monthly payments for a limited time. Your servicer expects you to give an amount that is manageable for you. Once your plan ends, you could go back to paying your usual amount. You could also decide to increase your monthly payments to catch up on payments. It’s totally up to you to discuss that with your servicer.
Another bonus point is that no additional fees, penalties, or extra interest will be charged to your account.
What Happens After Forbearance?
Forbearance does not mean your loan is completely forgiven. You’ll still need to repay the reduced amounts or resume making payments if you pause your payment. You can choose to:
You can decide to pay your balance in a lump sum to avoid foreclosure. While this is the best way to get back on your feet, it’s not required.
Increase Your Monthly Payments
Ask your mortgage provider to increase your monthly payments. That means you’ll pay back the amounts you paused or reduced in your forbearance plan. This way, you’ll catch up on your deferred payments.
Resume Making Payments
This option is available if you want to resume your regular payments. Your loan will be made current, and missed payments will be added to the mortgage term’s end without any extra fees or penalties.
Modify Your Loan
This option allows your servicer to permanently change the terms of your current loan. A loan modification may reduce your monthly payments to something you can manage or extend your mortgage term. Note that this is not a new loan but just an adjustment to the terms of your current loan.
Who Is Eligible For Forbearance?
Mortgage relief is available to homeowners within the Presidentially Declared Major Disaster Area eligible for direct aid. You can find out if your home is located in the major disaster zones by checking the Department of Homeland Security’s Disaster Assistance Website.
The disaster areas as per the recent declaration include:
- St. Johns
You are also eligible for relief if your home has been affected by a storm but is located outside the significant declared zones.
How Do I Get Started?
If your home was affected, you are expected to start the forbearance process with your servicer. Ensure that you take the following steps:
- Gather your financial information: Before calling your mortgage provider, prepare your essential financial information, including your accounts.
- Contact your mortgage company: Reach out to your servicer – the company listed on the mortgage statement – as soon as you have all your financial information.
- Describe your current circumstance: Your servicer needs to know that your home was affected by a hurricane which impacts your ability to make monthly payments.
Recovering from the aftermath of a hurricane can be very difficult and stressful. For this reason, most servicers have been able to provide relief to their mortgage holders. All you have to do is talk to your servicer about mortgage forbearance. Remember that your servicer should have reason to believe your home was affected.
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