Having trouble paying your mortgage? Here are a few tips to help

Keeping up with your mortgage payments can be an intimidating challenge, but Arizona Central Credit Union has several tips to get you on the right track, depending on your specific financial situation.

Whether your household income has experienced a hit or you’ve had to tackle unexpected medical expenses, AZCCU has six ways to best stay on top of mortgage dues.

1. Reassess your finances

There are five primary ways you can take financial inventory, which AZCCU recommends as the first step to mortgage literacy:

• Identify income and expenses – Keeping physical financial records is a major step in recouping potential dead money.
• Cut costs – Pausing or canceling subscription payments (ex. Netflix, Hulu) and minimizing entertainment purchases can free up funds for mortgages and other cost-of-living expenses.
• Pinpoint essential payments – With non-essential payments limited, direct your finances to catching up on your mortgage and other essentials (ex. food, electricity and water bills).
• Check debt status – Besides your mortgage picture, identify other outstanding loans (ex. car, phone) and bundle them into the same recovery plan.
• Evaluate emergency savings – Access how much money has been set aside to attack your mortgage situation and how long it will last as you recover.

2. Don’t hesitate to contact your lender about your mortgage

Like teachers advise their students not to wait until the last minute to complete an assignment, homeowners shouldn’t contact their lender about possible late mortgage payments right before they are due.

AZCCU said being honest about both short- and long-term financial hardships well ahead of payment deadlines will often lead your lender to offer support.

Lender support can take several forms:

• Repayment plans – A portion of past missed payments can be added to upcoming payments in order for you to catch up over time.
• Forbearance – Mortgage payments may be frozen temporarily by lenders — most commonly for three to 12 months.
• Loan payment options – In the case of severe financial hardship, lenders can permanently modify your loan terms, including a lower interest rate and an extended loan term.

3. Refinancing may be a good option

This tip is a viable strategy if you have both a steady income stream and a good credit score. Specifically, AZCCU encourages those with a credit score of 620 or higher, a debt-to-income ratio of 43% or lower, and home equity to consider refinancing.

A few benefits of refinancing may include lowering your monthly payment if the market is experiencing lower interest rates and empowering you to use cash to pay off other loans if you have equity in your home.

4. Be wary of scams

Scammers, who most commonly act via email or text, mask themselves as government or bank agencies and use time-sensitive messages to trap homeowners.

Always read messages carefully and never click on links unless you know the sender.

A few common financial scams are promises to “stop foreclosure immediately” and to modify loans in exchange for an upfront fee.

5. Consider advice from a housing counselor

If you are unsure about your next steps, there are housing counselors at the U.S. Department of Housing and Urban Development (HUD) who can offer expert advice.

You can also do your own research to find local and state housing agencies that can help personalize your mortgage recovery plan.

6. Consider government assistance programs

Besides Housing and Urban Development and other legal counsel, AZCCU suggests the following government assistance programs for mortgage recovery:

• Homeowner Assistance Fund (HAF) – All 50 states administer their own HAF program, which specifically aids those impacted by the COVID-19 pandemic.
• Fannie Mae and Freddie Mac hardship programs – Payment deferrals and loan modification are possible if your mortgage loan is eligible for Fannie Mae or Freddie Mac protection.
• Home Affordable Modification Program (for FHA loan holders) – Monthly mortgage payments can be lowered via loan extension and/or interest rate reduction.
• VA, USDA loan programs – Forbearance or payment reduction are options for VA and USDA loan holders.

AZCCU is your resource

Whatever the route you choose, Arizona Central Credit Union is equipped to support your current and future financial outlook.

Contact AZCCU online or call a representative at 866-264-6421.

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