Having Trouble Paying Your VA Loan? Mortgage Assistance for Veterans

Having Trouble Paying Your VA Loan? Mortgage Assistance for Veterans

Introduction

Many people have difficulty paying their mortgages. By 2021, ATTOM estimates that one in every 12,700 homes in the United States will be in foreclosure. Among Nevada’s 5,535 homes, one in every 5,535 is in foreclosure, while in Delaware, one in every 5,854 houses is in foreclosure.

As a result of the Coronavirus pandemic, unemployment and income loss have increased. There are mortgage relief programs available if you are in danger of losing your home to foreclosure.

What to Do If You Can’t Make the Payments On-Time

You should speak to your lender or servicer if you are having financial difficulties preventing you from making your mortgage payments.

Paying your mortgage late, or paying less than the due amount, can have serious consequences. You may also have to pay late fees and interest instead of the amount you already owe, making it harder to repay.

Credit scores can be affected by even one late payment. You will need a good credit score to get a new loan or refinance your existing loan and determine the interest rate you will pay.

When you’re having trouble paying your mortgage, contact your mortgage servicer – the company that accepts your payments – before receiving a default notice.

  • Get in touch with a free housing counselor. Counselors can provide you with free, legitimate help to find out what your options are. Learn how to spot and avoid foreclosure and mortgage counseling scams before talking to a counselor. These scams promise to stop the foreclosure but steal your money.
  • Organize your finances. You can reduce other expenses to demonstrate to your lender that you are doing your best to pay your mortgage. Consider these questions:
    • Why did you miss your mortgage payment(s)?
    • Is there any documentation to support your explanation for falling behind?
    • What steps have you taken to resolve the issue? What is the duration of the problem?
    • How do you see changes in your situation in the short and long term?
    • Do you have any other issues that prevent you from getting back on track with your mortgage?
    • Do you have any suggestions? Would you like to keep the house?
    • Could you work with a payment arrangement?
  • You should review your mortgage servicer’s website. Find out if there are any options available for you. To learn more, click here.
  • Contact your service provider to discuss ways to avoid losing your home. The servicer may be more likely to delay the foreclosure process if you work together to find a solution. Keep trying if you don’t reach your servicer on the first try.

Does the VA Offer Mortgage Assistance for Veterans?

Among the loan options offered by the VA are purchase and refinance mortgages, rehab and renovation loans, and energy efficiency mortgages. Find out more below.

  • Veterans are eligible for VA Purchase Loans, which require no down payment.
  • Refinances an existing VA mortgage to lower the interest rate or refinance from an adjustable to a fixed rate.
  • A VA cash-out refinance converts an existing conventional or VA loan into a VA loan. It allows you to convert your home equity into cash.
  • VA Energy Efficient Mortgages finance energy-efficient home improvements.
  • VA Renovation and Rehab Loans provide financing for home improvements.

Options to Avoid Foreclosure

With the help of a VA Loan, veterans can purchase a home. An advantage of these loans is that they typically offer favorable rates, a more straightforward qualification process, and no down payment. Foreclosures are still an issue for veterans – just like anyone facing financial hardship.

An FHA loan is required to qualify for a VA loan because you must finance the home through one of several FHA loan types. You can still use these tips regardless of your type of loan.

Related:Veteran Home Loan: Eligibility And Requirements

Option 1- Repayment Plan

When a borrower has missed a few payments but can repay the loan, a repayment plan might be a good solution. Restructuring the VA loan repayment will allow the homeowner to catch up and continue making payments. A restructuring usually entails ongoing to make the monthly payment plus an amount to compensate for missed payments.

Option 2: Forbearance

Taking advantage of special forbearance enables you to make up missed payments by giving you more time.

If a temporary financial setback, such as a rainy day fund draining after a car repair or losing your job, this may be your best option. If your financial situation is going to be down for the long haul, special forbearance is not an adequate solution.

Option 3: Loan Modification

With a loan modification, you can temporarily let go of missed payments and add them to the amount owed and any legal fees associated with the foreclosure. You can negotiate a new loan or new loan terms with your lender based on the outstanding balance.

The VA only covers 36% of VA mortgages. Lenders lose a great deal of money in foreclosures.

Foreclosed houses are sold at a loss because banks and lenders do not want your property. Changing the loan terms will allow them to continue to collect their money, so don’t be afraid to approach them about this.

Option 4: Sell Your Home

When your home is underwater, its market value is less than its debt. Short sales favor lenders, which means they’ll take what they’re able to get from the sale and forgive the loan. In some cases, larger lenders may not give you the time to arrange a private sale, but they may be willing to settle for a short sale. A quick deal may impact your credit score more than a deed-in-lieu.

Can I foreclose on my VA loan?

When borrowers lose their VA loan due to foreclosure, they will no longer qualify for VA loans, which means they cannot borrow as much without a down payment. Once they’re past the two-year mark, the previous foreclosure does not automatically prevent them from claiming this hard-earned benefit.

Those with second-tier entitlements may be able to purchase again, while others may have some basic VA loan entitlement left.

At some point, lenders will consult a borrower’s Certificate of Eligibility to determine how much entitlement remains.

Lenders determine whether you need a down payment by looking at the area where you are buying and how much you can borrow.

You can get post-foreclosure financing from Veterans United loan specialists.

What if My Home Loan is Not Through the VA?

If you’re interested in a quick solution, it would be best to speak with your lender, explaining what you need to do.

Borrowers can be individuals mortgaging their homes or businesses mortgaging commercial property (for example, owning their business premises, renting their premises to tenants, or investing in their portfolio).

Loan arrangements are often made directly by financial institutions such as banks, credit unions, and building societies, depending on the country concerned, or indirectly through intermediaries.

There can be considerable differences in mortgage loan characteristics, including size, maturity, interest rate, and repayment method.

If the borrower becomes bankrupt or insolvent, the lender will have priority over the borrower’s other creditors. To pay the other creditors, the borrower must sell the secured property.

Reach Out for Help

VA offers financial counseling

FinancialPoint, an independent firm with a team of professionals trained to handle numerous financial matters, offers free, professional financial advice to VA’s Insurance Service beneficiaries. Veterans can request planning 24/7 by going to the VA’s website. FinancialPoint’s website allows users to enter their information, and a financial professional prepares a customized financial plan based on that information.

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