Home & Mortgage, Loans, Mortgage, Student Loans

COVID-19 Financial Relief and Protections Extended

By: CFPB

Are you struggling during the pandemic? The federal government is extending relief and protections for many student loan borrowers, renters, and homeowners who are having trouble making payments during the COVID-19 pandemic.

Keep reading to learn more about these important updates that may help you. But, remember the COVID-19 pandemic and relief efforts continue to change and develop. Check our COVID-19 webpage for more information.

Payments suspended for federally-owned student loans

Principal and interest payments on federally-held student loans are automatically suspended through September 30, 2021.

If you have federally owned student loans, you don’t need to contact your student loan servicer or take any action. However, make sure your servicer has your up-to-date contact information and continue to check your mail or email for updates or information about your loans.

Suspended payments through September 30, 2021, will count towards any student loan forgiveness programs, as long as all other requirements are met.

Learn more about protections for student loan borrowers.

Protection from evictions for renters

The Centers for Disease Control and Prevention (CDC) has announced an extension to their current order that halts certain residential evictions. The extension stops evictions until at least March 31, 2021.

If you already get rental help from HUD, and your income has changed, ask for income recertification.

Learn about help for renters and what you can do.

Mortgage relief protections and options

There are two primary federal protections: forbearance and a foreclosure moratorium.

Forbearance

If you have a mortgage-backed by VA, USDA, FHA, Fannie Mae, or Freddie Mac, you have the right to request an initial forbearance of up to 180 days on your mortgage and a forbearance extension for up to 180 days if you have a COVID-related financial hardship.

  • For mortgages backed by the FHA, USDA or, VA, the deadline to request an initial forbearance is June 30, 2021.
  • Mortgages backed by Fannie Mae and Freddie Mac do not currently have a deadline for requesting an initial forbearance.

If you are already in forbearance and need more time:

  • If your mortgage is backed by Fannie Mae or Freddie Mac: You may request one additional three-month extension, up to a maximum of 15 months of total forbearance. But to qualify, you must be in a COVID forbearance plan as of February 28, 2021, so don’t delay contacting your servicer if you’re having trouble paying your mortgage and are not in a forbearance plan.
  • If your mortgage is backed by FHA, USDA, or VA, you may request two additional three-month extensions, up to a maximum of 18 months of total forbearance. But to qualify, you must have received your initial forbearance on or before June 30, 2020. Check with your servicer about the options available.

Foreclosure

  • If your mortgage is backed by Fannie Mae or Freddie Mac, your lender or loan servicer cannot foreclose on your home until after March 31, 2021.
  • If your mortgage is backed by FHA, USDA, or VA, your lender or loan servicer cannot foreclose on your home until after June 30, 2021.

Learn about mortgage relief and options you may have.

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Credit Cards, Credit Counseling, Debt, Debt Consolidation, Debt Settlement, Finance, Loans, Money Management, Mortgage, Student Loans

Protect Yourself Financially from the Impact of COVID-19

By: Consumer Financial Protection Bureau (CFPB)

Steps to take if you have trouble paying your bills or meeting other financial obligations

If you have trouble paying your bills/loans or paying on time, there may be a number of options to help, especially if you reach out early to your lenders or creditors.

Contact your lenders, loan servicers, and other creditors

If you’re not able to pay your bills on time check their websites, to see if they have information that can help you.

The CFPB and other financial regulators have encouraged financial institutions to work with their customers to meet their community needs.

If you can’t make a payment now, need more time, or want to discuss payment options, contact your lenders and servicers to let them know about your situation. Being behind on your payments can have a lasting impact on your credit.

Credit card companies and lenders may be able to offer you a number of options to help you. This could include waiving certain fees like ATM, overdrafts, and late fees, as well as allowing you to delay, adjust, or skip some payments.

When contacting your lenders, be prepared to explain:

  • Your financial and employment situation
  • How much you can afford to pay
  • When you’re likely to be able to restart regular payments
  • Be prepared to discuss your income, expenses, and assets

Work with housing and credit counselors to understand your options

These trained professionals provide advice for little or no cost, and they will work with you to discuss your situation, evaluate options, and even help you negotiate with your lenders and servicers.

Warning: If you’re considering working with a debt settlement company to address your debts, be skeptical of any company that promises to do it for an upfront fee.

Trouble paying your mortgage?

If you can’t pay your mortgage, or can only pay a portion, contact your mortgage servicer.

It may take a while to get a loan servicer on the phone. Loan servicers are experiencing a high call volume and may also be impacted by the pandemic.

Visit our blog on mortgage relief options for in-depth content to help you understand your forbearance options and avoid foreclosure in light of the coronavirus and the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act.

If you are renting from an owner who has a federally backed mortgage, the CARES Act provides for a suspension or moratorium on evictions. Read more in our renter section of the mortgage relief blog.

Trouble paying your student loans?

If you have student loans, you have options.

If your loan is held by the federal government, your loan payments are postponed with no interest until September 30, 2020.

For other kinds of student loans (such as a federal student loan held by a commercial lender or the institution you attend, or a private student loan held by a bank, credit union, school, or other private entity) contact your student loan servicer to find out more about your options.

Read our FAQs to learn more about what you can do.

Trouble paying your credit cards?

If you’re unable to pay your credit cards, talk with your credit card company and let them know that you cannot make a payment. You may get relief.

You may also want to work with a credit counselor. Reputable credit counseling organizations are generally non-profit organizations that can advise you on your money and debts, and help you with a budget. Some may also help you negotiate with creditors. There are specific questions to ask to help you find a credit counseling organization to work with.

Trouble paying your auto loan?

Your lender may have options that will help. Our tips include changing the date of your payment, requesting a payment plan, and asking for a payment extension

How to work with your bank or credit union

With many of us staying home to help flatten the coronavirus curve, online banking allows you to handle your finances from the comfort of home. Here are some tips for people who are new to online or mobile banking.

Generally, all bank deposits up to $250,000 are insured by the Federal Deposit Insurance Corporation. Deposits at all federal credit unions, and the vast majority of state-chartered credit unions, are also insured up to $250,000 by the National Credit Union Share Insurance Fund (NCUSIF).

How to work with debt collectors

If you currently have a debt in collections, you can work with collectors to identify a realistic repayment plan.

The Bureau offers a number of resources for contacting and negotiating with debt collection companies, especially as we deal with the impact of the coronavirus.

What to do if you lose your income

State and local governments vary in the programs and offerings to help those financially impacted by the coronavirus.

You can look to your state’s unemployment policies to identify current options for benefits. The recently passed CARES Act allows states to extend benefits to self-employed and gig workers, and to provide an extra $600 per week as well as an additional 13 weeks of benefits. Your state’s public health office may also have information.

Older adults may be impacted by the coronavirus and quarantine procedures in different ways than the general public. There may be government benefits available to older adults who need financial help. Visit benefitscheckup.org for more information and to see if you qualify for any state or local assistance.

Be aware of potential scam attempts

Scammers look for opportunities to take advantage of the vulnerable, especially during times of emergencies or natural disasters. Be cautious of emails, texts, or social media posts that may be selling fake products or information about emerging coronavirus cases.

Click here for more information on scams specific to the coronavirus.

The Federal Trade Commission has tips to protect yourself from possible coronavirus-related scams. The FTC and the Food and Drug Administration have also cautioned consumers to be on the look-out for sellers of unapproved and misbranded products, claiming they can treat or prevent coronavirus.

Learn more about how to prevent, recognize, and report fraud and scams.

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Debt, Loans, Money Management, Personal Goals, Student Loans

Student Loans: Preparation and Planning

Applying for Student Loans

News Flash: the most important part of your student loan occurs before you even get the loan.   What you do before taking out the loan can have the greatest impact on your life. It can mean the difference between paying back the loan in full to live a financially free life and being in default with mounting anxiety, stress and depression. This immense impact comes down to three main components:

  1. Your attempt to get as much free financial aid as possible before taking out a loan
  2. Your extent of knowledge and research on student loans
  3. Your creation of a repayment plan before you even apply for the loan

Before you borrow money, research and apply for as much free financial aid as possible. Grants and Scholarships are the main categories of free aid. Scholarships are often based on merit, meaning it depends on your academic worthiness or other accomplishments. Grants are often awarded based on financial need. Visit the financial aid website at your prospective university or college, local institutions (such as your credit union), the Federal Student Aid website at www.studentaid.ed.gov , and contact family, friends, and mentors to learn about other free aid opportunities. It is never too early to start researching. Always be aware and keep your grades up because many scholarships are offered based on GPA and performance throughout high school! Also look into a Work Study program, which allows students to work part-time to earn money for their education expenses.

Researching Student Loans

After this, if you find that you still are in need you can research student loans to cover the rest of your cost of attendance. There are multiple federal loan options including Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans, and Federal Perkins Loans. Research the qualifications and decide the best option. For instance, if you can demonstrate enough financial need, you may qualify for a Direct Subsidized Loan where the U.S. Department of Education pays the interest. Also before acquiring the loan, study the repayment plans that are available. For more information, take the Student Loan Webinar that will soon be offered by Christian Credit Counselors at www.christiancreditcounselors.org or visit www.studentaid.ed.gov. If you decide on a private loan, research it thoroughly as well because they may have less repayment options and different terms.

Repaying Your Loan

Finally, make sure that YOU have a vision and plan of how you will repay your loan beforehand. Decide on a repayment plan offered by the loan servicer then calculate your monthly payment and the income you will need to start paying now or after the grace period (depending on the loan). Perhaps you need a part-time job on or off campus to help make payments during school. Even if you do not have to make payments until after graduation, a repayment and income plan could help you make decisions about your academic program and career choice.

In short, applying for as much free financial aid as possible, researching loan options, and creating a repayment plan before acquiring a student loan gives you the best chance to repay it in full and live a student loan-free and stress-free life!

 

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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    Home, Home & Mortgage, House, Loans, Mortgage

    Mortgage Loan Types – Home Buying

    Home Buyers and First Loans

    Buying your first home? You may be thinking the hardest decision you have to make is picking a house.  However, the hardest decision you will be making in this process is what mortgage loan to sign for.  The main types of loans are: fixed rate, adjustable rate, interest only and reverse.

    Federal Housing Administration (FHA) Loans

    For first time home buyers, Federal Housing Administration (FHA) Loans may be the best option.  This program offers competitive interest rates, allows smaller down payments and has easier qualifications.  The typical down payment required with this program is 3.5 percent of the purchase price of the home.  FHA mortgage loans also require insurance, but they do offer a refund on it.

    Fixed Rate Mortgage

    A fixed rate mortgage is also referred to as PITI, Principal Interest Tax Insurance.  With this mortgage everything is included: principal, tax, interest and insurance.  For example, if you have a fixed mortgage, you don’t have to worry about forking over extra cash during tax season because you already paid this tax along with your mortgage. Usually a fixed mortgage is for 30 years, but you can also get a 15 year mortgage, depending on your finances.  If you do qualify for a 15-year mortgage you can expect a lower interest rate, but higher monthly payments.

    Adjustable Mortgage

    An adjustable mortgage has lower payments at the beginning of the loan.  You can get this mortgage for 15 or 30 years.  During this time, payments can be adjusted upward; as the market changes so do your payments.  This type of loan comes with more risk because your payments change regardless of whether your income increases.

    Interest Only Loan

    An interest only loan usually takes 5 or 10 years to pay off, during this time your entire payment is going to pay off the interest.  It’s a waste because although you are making monthly payments, you are not paying off your home.  The only positive aspect about this loan is that it allows customers who expect to increase their income in the future to take out a bigger loan than they can currently afford.  This type of loan comes with a high risk.

    Reverse Mortgage

    Reverse mortgage is especially made for those over the age of 62 and it was created through the government program HUD.  These citizens get a portion of their equity and receive a payment every month.  To become a part of this program there is no income or credit requirement.  However, the cost to enroll in this program can be more than $8,000.  Also, once the borrower dies, the bank settles the debt with the heirs.

    A Debt Free American Dream

    Achieving the American Dream without getting further into debt is possible.  Regardless of which mortgage you sign for make sure you know the details.  The key to avoiding traps is knowledge.  Be realistic and buy a house within your means.

    Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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      Kids & Money, Loans, Student Loans

      Student Loan Forgiveness Options

      Student Loan Forgiveness

      After my last post about Student Loans, I received a question asking for more in depth information about student loan forgiveness.  I researched and found the following information.  These are the careers that can possibly eliminate your student loans.  If you decide to partake in one of these programs, make sure beforehand that you can use it towards loan forgiveness.

      Military Forgiveness

      Students who are in the Army National Guard may be eligible for their Student Loan Repayment Program, which offers up to $10,000.

      Teaching Forgiveness

      Students who become full-time teachers in an elementary or secondary school that serves students from low-income families can have a portion of their Perkins Loan forgiven under The National Defense Education Act. This program forgives 15% of your loan for the first and second years of teaching service, 20% for the third and fourth, and 30% for the fifth. Contact your school district’s administration to see which schools are eligible.

      See also the US Department of Education’s pages on Cancellation/Deferment Options for Teachers and Cancellation for Childcare Providers, as well as the Teacher Loan Forgiveness Form.

      The US Department of Education maintains a database of low-income schools eligible for teacher loan cancellation for Perkins and Stafford loans.

      Legal and Medical Studies

      Many law schools forgive the loans of students who serve in public interest or non-profit positions. For more information, contact Equal Justice Works.

      The US Department of Health and Human Services offers loan forgiveness programs through the National Health Service Corps and the Nursing Education Loan Repayment Program. These programs offer loan forgiveness to physicians and registered nurses who agree to practice for a set number of years in areas that lack adequate medical care (including remote and/or economically depressed regions).

      The US National Institutes of Health’s NIH Loan Repayment Programs repays up to $35,000/year of student loan debt for US citizens who are conducting clinical medical research.

      The US Department of Agriculture’s Veterinary Medicine Loan Repayment Program (VMLRP) offers loan forgiveness of $25,000 per year for three years for veterinarians who commit to work in a veterinary shortage area for three years. The application deadline is June 30.

      Federal Agencies

      The Federal Student Loan Repayment Program allows federal agencies to establish loan forgiveness programs to help recruit and retain employees. This is technically a loan repayment program and not a loan forgiveness program, as the agencies make payments directly to the loan holder and the payments represent taxable income to the employee. The agencies can repay up to $10,000 in Federal student loans per employee per calendar year, with a cumulative maximum of $60,000 per employee. Employees must agree to work for the agency for at least 3 years.

      Public Service Loan Forgiveness Program

      This program lets borrowers off the hook from their remaining student loan debt after 10 years of full-time employment in public service.

      To be in the program, borrowers must be employed by the federal, state or local government; or any nonprofit, 501(c)(3) organization; or work full-time for AmeriCorps or Peace Corps.

      To qualify for loan forgiveness, the borrower must have made 120 payments during a decade as part of the Department of Education’s Direct Loan program.

      But, if the payments fall short or the borrower stops working full time, then there is the same risk of being kicked out of the program, with no loan forgiveness.

      I hope this information helps you further understand your options for eliminating student loans.

      Information found on finaid.org and money.cnn.com

      Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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        Budgeting, Kids & Money, Loans, Saving, Student Loans

        Student Loans: A Necessary Evil?

        Student Loans and Debt

        More than ever before, a college degree has become a necessity.  But many parents and students wonder how they are going to pay for college.  With a high number of students graduating college with student loans, the average debt will likely hit a record $28,700, projected by Mark Kantrowitz, publisher of Finaid.org.  It is important to have the necessary information on student loans before signing on the dotted line.

        Government and Private Student Loans

        There are two types of student loans – government and private.  Government student loans have flexibility with programs to help students pay back the loan because they can change the rules whenever.  This can work towards the advantage of the borrower but can also hurt the borrower.  If the student will take out multiple loans, a government loan is better because it provides continuity.

        Private loans are provided by traditional banks and they do not have as many programs to help students repay their loans.  These loans come with a low interest rate but can hurt the borrower because it accumulates over time.  Also, most of these loans include a clause that does not allow the signer to file for bankruptcy.  After graduation, you get a six-month grace period during which you don’t have to pay back your loans giving you time to find a job.

        Financial Respoinsibility

        If you decide you need a student loan, you must decide who will be signing for it.  There are two options, the student, who must be at least eighteen years old, or a (step) parent.  If a step parent or parent decides to sign he or she is now responsible for the full payment of this loan.

        For example, if a step parent signs and afterwards gets a divorce, the step parent is still held responsible for the full payment.  Also, if a student signs for a three year loan for $30,000 but he or she drops out of school after the first semester he or she must still pay the full amount of the loan.  The result is parent and child is equally stuck.

        Budgeting for the Loan

        Ideally, the student should work while going to school and open a savings account.  This way the student will have a cushion for after graduation.  This cushion should include living money and money to make loan payments.  Proper budgeting and planning when a student begins school will be more beneficial than starting to plan after graduation.

        However, if there was no proper budgeting or planning there are ways you can receive help.  Keep in communication with the lender, there are consolidation programs and government programs that can help.  Consolidation programs are for students who took out multiple student loans throughout their school career.  For example, John has four $100 monthly payments to different banks.

        Loans and Credit Consolidation

        With consolidation, his overall payments will be lowered and he will have the benefit of simplicity which will help him track the progress of his student loans.  With government loans, a student can work for a nonprofit organization or public agency for ten years which will reduce the amount owed on the account.  Also, if you are willing to commit a year volunteering for AmeriCorps, you get $4,725 to pay off your college debts, and a stipend up to $7,400.  For more information visit their website.

        In addition you can work for 27 months with the Peace Corps.  If you travel with the Peace Corps, you will get to defer most of your student loans until after you leave the program, and may get some of your loans reduced by as much as 70%. Visit their website for more details.  If you decide one of these programs is beneficial to you, make sure you have it approved before hand, know the rules, and always get it in writing.

        Other options for repayment include: pay in full, standard payment, graduated payment, income-based payment, and long-term payment.  In the majority of cases paying in full is never an option.  Standard payments are monthly payments with interest over a period of 10 years.  It gives you a great interest rate but high monthly payments.  For graduated payments, the payments will start low but increase every couple years for a 10-30 year period.  With income-based payment, your monthly payments are decided proportionate to your income and you get 15 years to pay it off.  The long-term payment method is a monthly payment plus interest for 30 years.

        Regardless of whether you decide student loans are for you or not, you now have the knowledge to make the right decision.

        Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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          Debit & Your Credit Score, Loans

          Unsecured Loans – Your Cheapest Options

          Dealing with Bad Credit

          The interest rates offered to you can be a result of bad credit scores or no credit at all. There are a lot of websites which offer an instant credit report for a small fee. Another reason to check your credit score is it may not be as bad as you think it is. Often credit ratings are simply misunderstood by individuals.

          An unsecured bad credit loan can work as a perfect solution to your financial need. You can use the loan amount for any purpose ranging from buying your dream car, going out for a long awaited holiday, combining debts to decrease the debt load, or for any personal reason. It solely depends on you and what do you with the loan money.

          Dealing with Lenders

          Usually, in the lack of guarantee, lenders demand high interest rates and heavy monthly installments. The lender undergoes a great risk of losing all their money if you fail to repay the amount. Therefore, they offer you a short repayment time so that they can get back all the money as soon as possible. However, the lack of security does not invite long legal paper formalities unlike secured credit; therefore, it becomes easier to get unsecured credit quickly.

          You should not forget to understand that this article can cover information related to cheap unsecured loans but can still leave some stones unturned.

          Consolidating your Debt

          To get the lowest rates, you want to have a loan of as little as likely to consolidate your debts. Therefore, start by totaling up your high interest debt. That figure is what you want to apply for. Besides your credit amount, also consider what terms you want. Many personal credits are for five years, but you can extend them for smaller monthly payments.

          If a home equity credit or refinancing is not a choice, you may think about transferring your high interest balances to a low rate credit card. This will lower monthly payments and make is probable to shrink debts. Another alternative involves consolidating debts through a credit counseling or debt management agency. These agencies negotiate lower interest rates and consolidate debts without collateral or credit checks.

          Credit Providers and Creditors

          The remaining task has to be carried out by the credit provider and their trained representatives. It is they who would deal with a number of creditors, a duty most debtors would love to be relieved of after the regular haggling with the creditors. These trained representatives are behind the negotiations that take place on the debts. A better speaker can help to reduce the repayable amount, thus saving a part of the unsecured debt consolidation credit for other reasons. It is to be pointed at this stage that an unsecured debt consolidation credit is a personal credit and can be used for any reason other than debt settlement. Therefore, the credit proceeds can be used for purchasing the car, financing holidays and also for undertaking home improvements.

          Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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