Last Updated on November 4, 2021 by Kravelv
COVID-19 has had a substantial impact on finances, which has led the government to allocate $10 billion to assist homeowners with mortgage payments. A mortgage stimulus program for middle class helps those individuals who are unable to pay their mortgages.
This is one of the largest mortgage stimulus packages ever released in America and aims to help the regular American by saving you up to $250 a month on mortgage payments.
Different Types of Mortgage Stimulus Programs
Before you begin to look into what kind of mortgage stimulus you can avail, you should verify the type of mortgage you currently have. For conventional loans, you can check on Fannie Mae or Freddie Mac websites.
If you have a USDA loan (administered by the Dept. of Agriculture) or FHA or VA loans, you may be eligible for other mortgage stimulus packages. For example, you could look into your lender’s mortgage refinance program, which would replace your current mortgage interest rates with lower rates.
You can also avail of forbearance for 6 to 12 months (depending on which lender your mortgage is registered with), which won’t affect your credit report and give you an extended timeline to pay your mortgage back.
If you have less than 5% equity at your mortgaged home, you will be eligible for HIRO. This system has replaced HARP to help homeowners refinance their mortgages without equity. This has been dubbed the middle-class stimulus program.
Qualifications
While qualifications for mortgage relief are dependent on which lender and type of mortgage you have, in general, the qualifications are:
- You must own and live in the mortgaged home
- The mortgage balance as of 2021 should be $548.250 or less
- Aid will be available to those who are struggling to pay their mortgages due to financial problems caused by COVID-19, like unemployment
- 60% of mortgage relief will be given to those whose median income is less than the national average or local average (whichever is higher)
How Will This Help You?
Before you decide about which mortgage stimulus is right for you, there are several factors you should consider:
- Is there a cash-out refinancing option available? If so, does it require a specific percentage of equity? How much will you be eligible to receive?
- What are the new interest rates you will pay?
- If you are not able to pay at the end of your extended forbearance, are there additional options available? For example, can you get a COVID-19 deferral?
- Are you eligible for a cash-out refinance option even if your mortgage is not with a government lender?
Make an Informed Decision When Selecting Your Stimulus Program
Choosing the right mortgage stimulus program for the middle class requires you to know the type of aid and relief offered by your lender and whether you qualify for it.
Mortgage interest rates have reduced since the beginning of 2021, and you can take advantage of this by refinancing your mortgage. This will not only maintain your credit score but even lead to better personal finances for you.
Many homeowners have still not taken advantage of the new stimulus package because they are unaware that they are eligible.
When you choose the right stimulus program, you can save on your monthly mortgage payments and even get some extra cash in your pocket to help you pay other bills.