Cash-out Refinance After Covid Forbearance

Many measures have been implemented in reaction to COVID-19 to assist those who are having difficulties.

The option to seek forbearance, or a delay in mortgage payments, was made available to anyone who had been affected by the virus or its repercussions on the economy.

COVID-19 forbearances, which Congress stated were meant to be non-credit impacting, are included in the same category as other natural disaster grants.

What Is a Mortgage Forbearance?

To provide relief for people who are financially distressed for any reason, a mortgage forbearance program is available.

Congress has given Americans impacted by COVID-19 the option to ask for up to a year of mortgage payment forbearance as part of the CARES Act.

A forbearance provides the necessary support for those who need it so they don’t worry about missed payments for a while.

It’s important to note that forbearance doesn’t forgive outstanding debts. When you’re exiting forbearance, you’ll want to chat with your mortgage servicer to see whether other choices are available to resolve the outstanding forbearance amount as the mortgage company will ask that you repay the entire outstanding forbearance amount in one payment. A lawyer that knows your financial situation may also be of help for exiting forbearance more smoothly.

What Happens With Your Mortgage Payments If You Get a Mortgage Forbearance?

If you are having difficulty making your mortgage payments, you may temporarily pause or reduce them.

Forbearance is a period in which your mortgage servicer or lender permits you to cease or decrease your mortgage installments while you build back up your finances.

Remember: under the CARES Act, help is available. It is not an automatic program and it may not cover the entire loan amount. Nevertheless, you can ask for up 1o 180 days (and even 180 days more) to stop any regular monthly payment.

Your missed payments still need to be repaid, so this is where it can get complicated.

There will be no additional costs, penalties, or extra interest added to your account as a result of this loan (beyond scheduled amounts).

To qualify, you do not need to provide any additional documentation. Simply state that you are having financial difficulty as a result of the epidemic.

Any federal government-backed mortgage or loan terms can enter this program, even conventional loans with private insurance.

For example, if you have your loan term under Fannie Mae or Freddie Mac, or if you have a USDA loan, FHA loan, or VA loan like many homeowners, your loan servicer can help you through the CARES Act loan program.

What Happens After My Mortgage Forbearance Is Over?

If you did request forbearance under the CARES Act (Coronavirus Aid, Relief and Economic Security), you can extend it up to a year.

This may mean your forbearance term may be coming to an end soon. What happens next? You will have to resume payments and take care of your new financial situation.

A mortgage refinance can lower your monthly payments and make your home loan more affordable even when interest rates are still historically low.

Mortgage Forbearance Repayment Under COVID-19

Once your forbearance has come to an end, you must make up for the missed payments. Your loan officer will work with you to determine whether there are any loss mitigation options available to assist you in regaining financial security.

You must be current or keeping up with your payments under any post-forbearance workout program that you may have.

Payments missed are damaging to your credit score, which might or may not have already been harmed by the forbearance.

May I Refinance my Mortgage Loan After Finishing a Mortgage Forbearance Plan?

In some cases, it is possible to refinance right after and even during forbearance.

You’ll have to fulfill the criteria to demonstrate to your mortgage lenders that you’re in good financial condition, either during or after the forbearance.

Can Mortgage Forbearance Affect Refinancing?

Fortunately, after you’ve been out of forbearance, you may refinance. However, there are some restrictions to bear in mind.

To refinance and obtain a loan modification, you must continue to pay your mortgage payments on time and improve your credit score.

An Excellent Idea Before Exiting Your Forbearance Program

Even before you exit forbearance, one excellent idea is to decrease your loan debt. Forbearance will not diminish your current mortgage repayment plan. It will only make it longer.

If your mortgage servicer requires you to pay back the forbearance in one lump sum, then it is recommended that you hire an experienced law firm that handles loan modifications and retain them to prepare a loan modification application right before the expiration of your forbearance.  

This will delay any foreclosure action that may be taken by the mortgage company, which will allow you the necessary time to submit your completed loan modification application. 


Why Do I Need to Do Three Consecutive Payments?

Refinance after forbearance is possible.

Your refinance timetable is determined by the type of mortgage loan you have.

If you have a regular loan backed by Fannie Mae and Freddie Mac, you must make three consecutive payments after exiting forbearance before even thinking about refinancing.

This means the three payments have to be consecutive on-time payments.

If you have a government-backed loan, such as FHA, USDA, or VA loans, the terms may differ.

Covid-19 Help Can Also Help You Refinance

Until Before 2020, homeowners had to wait 12 months after completing a forbearance plan before applying for a refinance.

The new rules after this international financial hardship enable borrowers who have experienced financial strain to obtain reduced rates, resulting in additional economic assistance and a better opportunity to make timely payments.

Will I Be Able To Ask For A New Loan After a Forbearance Period is Over?

Yes, it’s entirely feasible.

But before you make a decision, you should first calculate how much you’ll be paying each month and whether you can afford a new loan.

You may use a mortgage refinance calculator to compare your current loan and rate to a new one to ensure you’ll save money over time and can pay the same monthly amount on your mortgage rates.

Before submitting a mortgage application for new loan options, be sure to obtain a copy of your credit report and double-check your FICO score and payment history.

Why Think About Cash-Out?

Cash-out refinancing is a loan modification in which an old mortgage is replaced by a new one with a higher amount than what was owed on the prior loan, allowing consumers to use their home mortgage to acquire cash in their wallets.

Benefits From Cashing Out

In a cash-out, you receive more money in exchange for your current mortgage amount than your old one was worth. The difference is given to you in cash.

You often pay a higher interest rate but have direct access to funds you may need for an emergency. This might imply a greater monthly payment, but it may also assist you in overcoming your financial difficulties.

With cash-out refinancing, a lender will assess your borrowing limitations based on bank rules, the loan-to-value (LTV) ratio of your property, and your credit history.

Put your property to good use for you. Contact your attorney and inquire about options.


In conclusion, keep in mind that any missed payments from your forbearance period will have to be made up.

There are several alternatives for refinancing, so be sure to inquire about them with your servicer.

Depending on the terms of your current plan, forbearance may or may not affect your ability to refinance and affect your credit report.

Finally, make sure you are prepared to submit a loan modification application if the mortgage company is asking you to repay the entire forbearance amount in one payment and you cannot afford to pay it.


Tips for Getting your Loan Modification Approved in Michigan

It’s possible that your mortgage payment will be lower or your house may be foreclosed. If you’re having trouble making mortgage payments, it’s worth exploring the possibility of a loan modification.

A home loan modification might involve extending the terms of your loan, lowering your interest rate, or switching from an adjustable-rate mortgage to a fixed rate.

A mortgage modification is a change in the terms of an existing mortgage that lenders make.

A modification is usually made because the borrower is unable to pay the original loan that was caused by hardship. Some individuals may be eligible for government aid in loan modification.

Six things nobody tells you about loan modification and foreclosure

  1. The most effective loan modification procedures are handled by an attorney or a settlement business.
  2. Modifying a mortgage isn’t nearly as expensive to the lender as default or foreclosure.
  3. Mortgage lenders must make reasonable efforts to communicate with late payers.
  4. The loan company wants you to remain in your house just as much as you do.
  5. Modification may harm your credit score, but not as much as a foreclosure would.

  1. The mortgage company needs to assign someone who can answer the borrower’s questions and help them with the available loss mitigation options.

Ten good ideas to get approved for a loan modification in Michigan (and avoid foreclosure!)

  1. Check out the Michigan Homeowner Assistance Fund (MIHAF), which may provide you with up to USD 25,000 to assist you to pay late mortgage/housing payments, such as property tax and insurance escrow shortages. With this help, getting a modification may become easier.
  2. You must currently be living in and using the property as your primary residence to obtain a loan modification. Make sure your lender knows this and you can demonstrate it easily.

  1. Keep your receipts well-organized, because you might need them to show an increase in your household expenses, such as:
  • increase in household size
  • inadequate medical insurance
  • costs to reconnect utility services directly related to coronavirus pandemic
  • medical expenses
  1. Propose a repayment plan that includes your regular payments over an extended time, as well as your past-due payments. You’ll save time by not having to pay a lump sum if you move your payments over.
  2. If you can, choose to reinstate your loan. This will let you pay off the total amount you owe in one payment by a specific date. A reinstatement is easier to get approved.
  3. If you have been subjected to racial or ethnic prejudice or cultural bias in American society, there’s a good chance that you are a socially disadvantaged individual. This is out of your hands, such as poor command of the English language. There are special programs that can assist you in this case. Contact your lawyer for them.
  4. Check that your home is not in any of these categories:
  • A vacant lot without a dwelling
  • An abandoned house
  • A 2nd home
  • An investment property
  • A property where the owner has received Emergency Rental Assistance Funds
  1. Document your income through recent tax returns, W2 forms, 1099 forms, and/or pay stubs. You’ll also need to include an estimate of any other income you have coming in, such as:
  • spousal support payments
  • alimony payments
  • child support payments
  • disability benefits
  • pension benefits
  • social security benefits
  • unemployment
  1. Insurance verification is required. You’ll need evidence of insurance to give to the lender and your counselor.
  2. Keep good records of everything related to the loan modification. Write down the conversations you have, the names of the people and organizations you spoke with, their phone numbers, when you spoke with them, and what was discussed. Make copies of all communications exchanged during the procedure.

Trial mortgage modification

It’s not uncommon for a loan modification to take days, weeks, or even months. Even after your lender accepts your application for modification, the process isn’t finished.

Your lender may also request that you go through a trial modification period. This trial period allows your lender to see if you’re capable of making the new mortgage payment.

How long is the trial loan modification?

If you obtained your loan modification through the government’s HAMP program, you must complete this trial period. The typical trial modification duration is 90 days.

What happens if you miss the trial mortgage modification?

If you miss payments during the trial period, your lender has the option to withdraw its previous approval of your modification application.

In conclusion, remember that you’re having trouble making your mortgage payments, don’t hesitate to reach out for help. There are many agencies and resources available to assist you. Contact Babi Legal Group immediately to see how we can assist you today!


Does Covid-19 Hardship Forbearance Affect Credit?

The coronavirus/Covid-19 epidemic has caused significant economic uncertainty, putting millions of Americans in financial distress and forcing them to cope with bills they were unprepared for, such as rent and insurance premiums.

A lot of people have lost their jobs, been furloughed, or had their pay cut because of Covid-19. For these people, lenders and creditors are offering a lot of different ways to repay debt.

One of your choices may be forbearance, which is an agreement with a lender or creditor that enables the borrower to delay or suspend loan payments for a set amount of time.

In this article, we will talk about how Covid-19 hardship forbearance may affect your credit score. Many people are struggling during the pandemic and have had to put their loans into forbearance. This means that they are not making payments on their loan for some time.

We will go through the ins and outs of forbearance and how it can benefit you or harm your credit score.

What happens if you have missed payments in your mortgage payments?

Missed payments can result in a tremendous drop in your credit score, resulting in increased late payments and fees.

Your lender will report your failure to pay your mortgage to the three main credit bureaus if you don’t make timely payments. Your credit score will be lowered as a result.

Also, a late charge will be assessed on the payment you failed to make. Late fees are usually charged after a seven- to 15-day grace period following the due date.

If you miss one mortgage payment, will you lose your financial footing?

On the bright side, failing to make a single mortgage payment seldom results in foreclosure. You usually have to fall at least three months behind and fail to communicate with your lender for this to happen.

Multiple missed payments might result in foreclosure, further damaging your credit. There can also be penalties or additional interest added to most mortgages.

What is forbearance in the US?

If you’re having trouble making your mortgage payments, you may stop or reduce them temporarily. This is called forbearance.

The forbearance period is a time in which your mortgage servicer or lender permits you to pause or lower your mortgage payments while you restore your finances.

What mortgage forbearance does NOT mean

Forbearance does not imply that your debts are forgiven or erased. You remain liable to pay any payments, which in most situations may be paid back gradually or when you refinance or sell your property.

Your loan servicer will contact you before the end of the forbearance to let you know how to repay the missed payment.

What is financial hardship in the US?

When the debtor’s current and projected income and liquid assets are insufficient to meet basic living expenses at present and anticipated ordinary intervals over the anticipated period of collection, hardship is assumed.

Financial hardship is an unfavorable event that has harmed your finances beyond your control and for which you may ask for suspended payments or reduced payments.

Layoff or a reduction in salary, significant sickness or injury, new or worsening disability, imprisonment, natural disaster, and long-distance job transfer are all examples of financial difficulties that a lender might consider making a repayment plan.

Will your credit scores be affected by forbearance?

You can’t just neglect a payment and expect no consequences without discussing your issue with your lender.

If you agree to forbearance with your lender, they may report it to the credit agencies. However, as long as you stick to the agreement and make all of your payments on time, your credit score will not be affected.

If you are having trouble making your payments on time, or if you think you might lose your home, one thing you can do is to ask for help. You can ask your lender to work with you, and they may be able to help you avoid late payments or foreclosure. This will help protect your credit score.

Before canceling any sort of loan, you’ll need to work out a bargain with your lender — otherwise, your credit score may be harmed.

What is the COVID forbearance plan?

If you have a federally backed mortgage and are having economic hardship as a result of the coronavirus pandemic, you might be eligible for COVID hardship forbearance under the CARES ACT.

What are federally backed mortgages?

These mortgage loans include HUD/FHA, VA, USDA, Fannie Mae, and Freddie Mac loans. They can enter loan forbearance programs by your loan servicer.

What if my mortgage payments are not federally backed?

Servicers may provide comparable forbearance choices for mortgages that are not federally guaranteed. It is possible to reach a forbearance agreement with your servicer.

If you are struggling to make your monthly mortgage payment, your servicer is required to discuss payment relief options with you, also known as loss mitigation options. This is regardless of whether or not your loan is federally backed.

There will be no more fees, penalties, or extra interest (beyond expected amounts) charged to your account as a result of this pandemic, and you do not need to submit any new documents to qualify. All you have to do is tell your servicer that you’re having difficulty with the financial situation due to a pandemic. It is improper for the mortgage company to charge you late fees and penalties if you have received a forbearance due to Covid-19.

Will Covid-19 count as forbearance?

The term “forbearance” is commonly linked to home mortgages, but any loan agreement you’ve signed up for can be accepted. There can be many forbearance options for a home loan that can avoid foreclosure actions.

Because of the massive and immediate economic impact of the Covid-19 pandemic, several creditors and lenders are providing unique debt repayment choices on many obligations. This includes mortgages, student loans, auto loans, credit card bills, utility bills, property taxes, and small business loans.

Depending on what agreements you reach with your creditors, they may agree to allow decreased or delayed payments for a specific time of up to 12 months. Paused payments or deferred payments until your forbearance period ends might not affect your payment history nor your credit report if you come to an agreement that is financial hardship-related.

Some companies may offer to reduce the interest rate on your debt. However, there are no specific federal guidelines that all companies must follow when it comes to forbearance agreements. You will have to request forbearance to learn what additional resources can your lender directly give to you for late payment.

Mortgage requirements for requesting forbearance plans due to Covid-19

The eligibility requirements for debt forbearance vary depending on the type of debt you have. Each lender and creditor has its program with its own set of rules.

For example, most mortgage forbearance programs require that you are experiencing a “financial hardship” due to the pandemic of Covid-19. This could be due to job loss, reduced hours, or illness.

You may be asked to provide documentation of your financial hardship, such as pay stubs, bank statements, or doctor’s notes.

Borrowers who have conventional mortgages guaranteed by Fannie Mae or Freddie Mac, which underpin the majority of loans in the United States, or the U.S. Department of Veterans Affairs (VA), Federal Housing Administration (FHA), or USDA can get assistance as well as deferment and postponed payments options.

What if my loan is not federally backed up?

If your loan isn’t federally backed, you can still have a payment deferral. You will need to contact your mortgage servicer to learn if they provide any Covid-19 pandemic relief.

Check with your monthly statement or go to the website of your mortgage servicer for information on how to reach a customer service representative.

What if I don’t know if my mortgage is back up federally?

If you’re a homeowner who isn’t sure which corporation guarantees your mortgage, go to the US Department of Housing and Urban Development’s website for more information on Coronavirus/Covid-19 actions.

What are the drawbacks of Covid-19 loan forbearance?

Although forbearance can help you deal with your short-term money problems, it has some disadvantages. For example, if you use a forbearance period, your credit rating and credit scores could be affected.

You’re not receiving “free money” if you enter into a forbearance agreement for your mortgage loans. Depending on the repayment plan you choose with your lender or creditor, you may have to pay back the interest that accumulates during your approved deferral period, and late charges might still apply.

You will also have to repay the forbearance amount at the end of the forbearance, which may in itself cause a new hardship for you.  

If that’s the case, then you need to make sure to seek a loan modification to account for the forbearance amount.

Notify your lender if you’ll still be charged late fees, when and how they will be levied, and how your forbearance agreement will be recorded with the national credit bureaus.

Covid-19 pandemic forbearance for mortgages

For those who are having trouble making mortgage payments, the federal government has announced a temporary nationwide moratorium on foreclosures and evictions. This has also expired.

People who have lost their jobs as a result of the Covid-19 epidemic can qualify for payments to be halted or reduced for up to 180 days, depending on their circumstances.

To qualify for this forbearance, you must contact your loan servicer and request it.

You can look up your loan on and to see whether one of them purchased it from your original lender, or contact your mortgage servicer directly if you have questions about your payment status.

In addition, Fannie Mae and Freddie Mac have halted foreclosures and evictions during the Coronavirus/Covid-19 pandemic, so visit their websites for regularly updated information on how to get relief.

Covid-19 pandemic forbearance relief for credit cards

Every credit card company has different options and eligibility requirements for forbearance or payment deferrals on your credit card debt. If you are thinking or asking for payment forbearance for your credit card balances in a way that will not affect your credit reports, ask your servicer for their relief options.

To find out what alternatives are available and what you need to do to get assistance, go to the website of your credit card company. Even if yours doesn’t currently offer a solution that meets your needs, it may add new choices shortly, so keep an eye on updates.

Card issuers generally provide forbearance on a case-by-case basis, and they may not give all relief possibilities to everyone who qualifies.

Your credit card companies will have specific choices accessible to you based on how long you’ve been a cardholder, how serious you’ve been about making timely payments, and the amount of your outstanding credit card debt. So your credit history might help get you more options for monthly payments.


Key Terms to Understand about Loan Modifications

Buying a house is an exciting event, but it may also be one of the most difficult if you don’t know anything about mortgages.

Buying a home can be a very complicated process. There is a lot of paperwork that needs to be completed.

It is important to know what to expect, especially if you are buying a home for the first time. This will help you make the best decisions for your family.

What is a mortgage loan modification?

Loan modifications are changes made to a borrower’s terms of an existing loan by a lender. The changes can be made to the interest rate, principal balance, or length of the loan.

What are the benefits of a loan modification?

Loan modifications can provide borrowers with much-needed relief from unaffordable mortgage payments. By reducing the monthly payment, borrowers may be able to avoid default and keep their homes.

What kind of modified loan can you acquire?

A loan modification might be thought of as:

  1. an extension of the length of time for repayment
  2. a reduction in interest rate
  3. a different type of loan
  4. any combination of the three above

Why would you do a mortgage modification?

Changes are made frequently because the borrower is unable to pay the original loan.

If you are struggling to make your mortgage payments each month, you may want to consider a loan modification. A loan modification can change the terms of your loan to make it more affordable for you.

Some common modifications include extending the length of the loan, reducing the interest rate, reducing the principal balance, or changing the type of loan.

How can you apply for a mortgage loan modification?


The most effective loan modification techniques are handled by an attorney or a settlement firm. Some people might qualify for government aid in loan restructuring.

The ultimate goal, in any case, is to save money the borrower owes. Sometimes you do it through a new loan or you might use a flex modification program.

It is important to understand how loan modification works, so contact your loan servicer today or call us for additional resources that might help you get a loan modification.

Do you understand how mortgage payments work?

Taking out a mortgage is usually the first step in purchasing a house for most people. It’s one of the biggest loans we’ll ever take out, so it’s critical to know how your payments work and what options are available to cut them down.

When you acquire a home, you must pay a deposit and a mortgage. The larger your deposit, the less of a mortgage you will require to borrow.

The term of the mortgage and the interest rate will determine how much it costs you to pay off your mortgage.

You’ll then make a monthly payment to the existing mortgage so that it is paid off when you finish repayment.

The importance of a loan estimate

Your loan officer must provide you with a loan estimate within three business days of applying.

The loan estimate is an overview of your mortgage loan terms and settlement fees, which are also referred to as closing costs or the cost of closing your mortgage transaction.

With this data, you may evaluate your mortgage loan offer and explore a few more options before accepting it. Call another real estate agent or visit other mortgage lenders that can reduce your monthly payment.

Loan modifications dictionary

Adjustable-rate mortgage

An adjustable-rate mortgage (ARM) is a home loan with a changing interest rate. For a length of time, the starting interest rate on an ARM is set.

After that, the outstanding balance is re-fixed at yearly or monthly intervals.

Bank statements

A bank statement is a document sent to the account holder every month that summarizes all transactions in an account over some time.

Closing costs

Closing costs are the fees you pay to your lender when you close on your loan. This includes processing fees as well as other costs associated with the loan.

Conventional loan

A conventional loan is a mortgage loan that isn’t guaranteed by a government agency.

There are two types of conventional loans: conforming and non-conforming.

  • Conforming loans are those that meet the requirements set by Fannie Mae and Freddie Mac.
  • Non-conforming loans don’t meet those requirements.

Credit reports

A credit report is a statement that shows your credit history, including how you have historically paid back loans and the status of your credit accounts.

The majority of people have 3 credit reports provided by Experian, Equifax and Transunion.

FHA loan

The Federal Housing Administration insures an FHA loan, which is a government-backed mortgage. Mortgage insurance protects consumers against mortgage default.

An FHA loan is more readily available to first-time buyers than conventional alternatives since it requires lower minimum credit scores and down payments.

This type of loan, however, carries with it an additional monthly premium amount to insure the loan.

Federal Housing Finance Agency (FHFA)

The Federal Housing Finance Agency was established by the Housing and Economic Recovery Act of 2008 (HERA).

The FHFA is in charge of ensuring that Fannie Mae and Freddie Mac (the Enterprises, as well as the Federal Home Loan Bank System) are operating by their charters.

The Federal National Mortgage Association is often referred to as Fannie Mae. It is a government-sponsored organization and a publicly-traded business based in the United States.

This association promotes the purchase, refinancing (or loan modification), and renting of homes for everyone.

The Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, is a government-sponsored corporation that is publicly traded.

Financial hardship

Financial hardship is when someone is having a lot of trouble paying back their loan.

If you have a lot of trouble paying your bills, or if you can’t pay back your loans and debts on time, then you’re in financial hardship.

According to credit law, there are certain things you can do to protect yourself and get help.

Fixed-rate mortgage

A fixed-rate mortgage is a home loan where you agree to pay the same interest rate on the loan for the entire term. The interest rate on the loan will not vary during the term, and the borrower’s monthly interest and principal payments will stay constant.

Forbearance period

Forbearance is a lender’s concession to allow a borrower to avoid foreclosure or default through a temporary suspension of loan payments.

A forbearance period is established between the borrower and lender. The key factor in a forbearance period is that the borrower will be obligated to repay the number of suspended payments once the forbearance expires.

Hardship statement

A hardship letter is a document you send to a lender to explain why you have not been able to make your debt payments. This letter should include specific details such as when the hardship began, the cause, and how long you expect it to last.

Home equity

Equity is the difference between how much your mortgage is and how much your home is worth right now.

There are two ways that your equity can increase:

  • As you pay down your mortgage, the amount of equity in your home will go up.
  • Your equity will also increase if the value of your home goes up.

Your equity may decrease if the value of your house drops faster than you’re paying down the principal amount on your mortgage.

Interest rate

The interest rate indicates the amount that you’ll pay in interest on a loan. It also shows how good the benefits are of saving money. If you’re a borrower, the interest rate is the amount you pay for borrowing money as a percentage of the total loan sum.

Interest rate cap

The terms “interest rate cap” and “rate ceiling” are often used interchangeably.

An interest rate cap structure is a set of rules regulating how much an interest rate can rise on variable-rate loans.

Interest rate caps may be put in place on all sorts of variable-rate debt.

However, interest rate limits are often utilized in variable-rate loans and especially adjustable-rate mortgage (ARM) loans.

Life of the loan

The average life is the time it takes for a debt to be repaid through amortization or sinking fund payments. The average life calculation is used by investors and analysts to evaluate the risk involved in amortizing bonds, loans, and mortgage-backed securities.

Loan modification programs

A loan modification program helps to change the original terms of your mortgage loan.

A loan modification differs from a refinance in that it does not refund your outstanding mortgage and replace it with a new one. Instead, it adjusts the terms of your existing loan.

A loan modification is a change that can imply a new monthly payment. Your loan terms might change so much that your financial hardship is relieved.

Loan payment

The monthly payments are the amounts required to be paid back by the borrower following the terms of the loan agreement, note, and bond.

Loan term

A term loan is a loan that is repaid in installments over a set time, usually one to ten years.

Term loans generally offered by the mortgage company range from 15 years to 30 years. In some loan modifications, the lender can extend the loan to a period of 40 years to allow for a more affordable payment.

Missed payments

If you don’t make a payment on time, it’s called a missed payment. This happens when you send the money to the lender or service provider after the date that the monthly mortgage payment was due or after a grace period for the monthly mortgage payments has passed.

Missed payments can lead to other charges you agreed to pay in the mortgage and note signed at closing, such as late fees and penalties. 

Monthly payments

The monthly payment is the amount paid each month to pay off the loan within the agreed deadline. When a loan is taken out, it isn’t simply the original sum borrowed that has to be repaid; rather, accrued interest must also be reimbursed.

Mortgage contract

The mortgage contract allows most consumers to buy real estate and protects the interests of lenders and borrowers.

Mortgage lender

Your mortgage lender is the company that loaned you the money to buy your house. Your mortgage servicer is the company that sends you your mortgage statements and who also handles any day-to-day activities with your loan.

Personal loans

A personal loan is a loan provided by a bank, credit union, or an online lender that you repay in monthly installments or tranches over two to seven years.

Personal loans can be a viable alternative for non-essential purposes, such as debt consolidation. 

Personal loans can either be secured or unsecured loans.  

A secured loan is a loan that has some type of collateral pledged to protect the lender in case of a default. A typical example is a home you purchased or a car loan.  

An unsecured loan is a loan that only carries a guarantee to repay without any pledge of security.

Title/Settlement companies

A settlement firm is a business that manages the closing of real estate transactions, such as title insurance and escrow. It may also be known as a real estate closing company, a title agency, or an escrow company.

A settlement firm’s goal is to assist with the closing of a property that is being purchased. Not all firms handle every aspect of closing.

Private mortgage insurance

If you have a regular loan and take out private mortgage insurance, also known as PMI, you may be required to pay for it. If you stop making payments on your loan, like other forms of mortgage insurance, PMI protects the lender—not you—from defaulting.

Urban development

A city’s development is the growth of cities and their surrounding areas. This includes the social, cultural, economic, and physical aspects of city life.

VA loans

A VA loan allows active-duty military personnel, veterans, and their surviving spouses to borrow money to purchase a house with no down payment, no mortgage insurance, and light credit standards.

If you’re considering a VA loan, learning how they work will help you decide if it’s the right one for your purchase or refinancing plans.

You can reduce your monthly mortgage payment today!

Mortgage refinancing or having a loan modification is one way to do this.

When you refinance, you simply renegotiate your existing loan with a new one, typically with a lower interest rate. This can reduce your monthly mortgage payments and save you money over the life of the loan.

You can also choose to refinance your home loans for a shorter term, which will also lower your monthly payments.

Another option is to make a lump sum payment towards the principal of your loan.

This will reduce the amount of interest you pay over the life of the loan, and can also help you pay off your mortgage sooner.

Babi Legal Group can help you obtain a loan modification

If you’re struggling to make your mortgage payments, a loan modification may be an option for you. Your loan services must offer mortgage assistance according to your case and mortgage term.

Babi Legal Group has over 15 years of experience in helping its clients to avoid foreclosure and lower the principal balance of their existing mortgage.

No matter what your annual income is or who is your loan servicer, Babi Legal Group can help you refinance your mortgage term and mortgage payment so the terms of your loan are not laying heavy on you.

Avoid the foreclosure process if you cannot do any regular payments. We will help you look for real alternatives for an alternative healthy personal finance situation.