All across the country people are feeling not just the pressure of a global pandemic, but also that of an economy in free fall. If you are one of the tens of millions of Americans who have lost their jobs in the last two months, or one of the many who has been forced to reduce hours or cut back on work to protect your health and others, you are likely struggling to figure out how you will pay your bills. Fortunately, right now many institutions are providing some breathing room during this time. Here are some options for those who are grappling with making payments right now.
Fortunately, for those worried about being able to come up with enough money for mortgage payments, there is almost certainly relief. If you are able to pay your mortgage this month you should go ahead and do so, and it's likely that calling them for other information is going to prove hard. Mortgage lenders are being hit with an extremely high volumes of calls, and if you're one of the many Americans who won't be able to make their upcoming payment, then it's time to call immediately and wait until you are able to get through. Currently the federal government is providing some relief.
In order to take advantage of the protections offered by the CARES Act, you must have federally-backed loan. In order to find out if you do, you must first determine who services your mortgage. This is the institution or company where you make your payments each month. Your mortgage service provider is required to let you know who owns your mortgage.
If the mortgage is owned or backed by any of the following institutions, then it qualifies for protection under the CARES Act:
If your mortgage is not federally owned or backed, there may still be help available. There are two good options. The first is to once again immediately contact your mortgage service provider. They may offer assistance, though not required to do so by the CARES Act. Additionally, many state governments are offering help. Check your state's government website to find out more. Also, some private lenders are offering direct relief to homeowners. Bank of America, for instance, has policies in place to directly help those who have mortgages with them. If you are struggling and find out your loan is not federally guaranteed it is worth visiting your lender's website and calling to see if they either have a general policy in place or can help you in the coronavirus crisis. Many institutions across the board are responding with ways for people to delay payments.
There is some good news on relief with student loan payments. Those with Federal student loans will automatically have those loans placed in forbearance. Originally in March, those needing to delay these payments were told to contact their service providers for student loans. However, as part of the stimulus package passed by Congress, a 6-month period has gone into effect of student loan forbearance. During this time, which runs from March 13, 2020 until September 30, 2020 all federal student loan interest rates have been lowered to 0% and additionally no one is required to make payments. This suspension of payment is automatic and should not require a phone call.
To make certain that your student loan qualifies, you can visit the student loan provider website and sign into your account to see if the payment due is $0. If not, and you need the forbearance, it is worth investing the time to call. Here is some more information about the federal plan for student loan forbearance. Only loans that are through the federal Department of Education will qualify for the forbearance from the stimulus package. Perkins Loans and Federal Family Education Loans do not qualify automatically. For help with paying Perkins loans, borrowers should contact their school directly for more time to pay, while Federal Family Education Loans will require contacting the loan servicer in order to request traditional forbearance.
Although required student loan payments to the federal government are temporarily suspended, the decision about whether or not to pay, if you can afford to, should be carefully considered. For many, the forbearance will only extend the length of the loan. However, for those with Public Service Loan Forgiveness (PSLF), the suspended payments will count as regular payments and will not be held against those who are making use of this program.