PHOENIX — Getting help with your mortgage just got a little easier, thanks to the CARES Act.
"You can call up XYZ bank and say you just lost your job, really need some assistance, and then basically, put your mortgage payments on hold," explains Jeremy Schachter, a mortgage banker with Fairway Independent Mortgage Corporation in Phoenix.
Schachter says forbearance, or temporarily delaying payments, can keep more people from losing their homes.
"Banks don't want your homes. Banks want your homes to be paid off," he says.
Relief can vary, but Schachter says a typical forbearance period lasts for 90 days and can be extended for up to a year. Lenders are working out all different times with homeowners, but the big takeaway is that forbearance is not forgiveness, meaning the money you owe will still need to be paid back eventually.
"The challenge is - how do you pay that back? Is it going to be tacked on at the end? Is it a balloon payment where you miss three payments of $1,000, let's say, and then you owe that $3,000 at the end of the period?"
Schachter explains that forbearance is meant for people who really need it, not for those trying to game the system or capitalize off a rough situation.
"I have heard of many people who are trying to use this as a savings account. After three months, I'll pay the money back. I'll put some money into the stock market. Maybe I'll save it up for another house to buy? That's not what the purpose of the CARES Act is."
If you're having trouble making your payments, it's important that you communicate with your lender so you can try and set up some sort of plan.
The phones at banks and lending companies are ringing off the hook because of high volume right now, so Schachter suggests doing as much as you can over the internet.