Here we are, just out of perhaps the oddest Memorial Day weekend in memory.
The summer is here! But it feels like much of our country is still mired in winter. And that feels like it is still the case, no matter the hints of progress against this virus, and no matter the steps taken towards reopening you might be experiencing in your locality.
But Memorial Day was a good reminder.
Our current struggles can be overcome.
Starting this week, I’m returning to my previous “Real World Strategy Note” format, for the sake of offering you some digestible, actionable information about relevant topics.
And this week, let’s talk about mortgages…
“Real World” Personal Strategy Note
Be Careful With Your Mortgage
“The only way around is through.” – Robert Frost
If you are currently struggling, and your June payment looks dicey, my advice to you: be very careful.
Recent numbers that I’ve seen from the real estate data firms indicate that as of last week, 4.6 MILLION mortgage holders were in some sort of forbearance — which is up from 150,000 or so in early March.
And that number is likely to already be significantly higher.
Now it’s true — the federal government has made it possible for borrowers with government-backed mortgages to suspend their payments for up to a year without immediately paying it back.
But there’s a key phrase in there: “government-backed”.
That’s because about 30 percent of homeowners have mortgages that are owned by banks or private investors, which are not governed by the same rules.
If this is the case for your mortgage, you might be on the hook for the FULL amount of what you have deferred at the end of your forbearance period (which is often three months).
The mortgage companies are all offering these options right on their home pages, and some do a better job than others of spelling out the terms.
But I urge you: make sure you understand the terms of repayment before you enter into this agreement.
The good news is that there will be ways through these problems (extending terms, renegotiation, etc.), but they can be cumbersome and paperwork-heavy.
And we’d be happy to help you figure out any tax and financial implications of these decisions as well.
Don’t forget … we’re in your corner.
And, of course, feel free to send this along to your friends who might need help, especially when it comes to dealing with the tax-related issues all of this might bring up.
That’s what we do!