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Renters/First Time Home-buyers: How to Stay On Track During the Coronavirus Crisis

You've been working toward the purchase of your first home, and now you're surrounded by uncertainty. 

How can you stay on track and still meet your goal?

If you are still earning your regular income: The slowdown in the market could even help your chances of getting the home you want at a good price. The process may move more slowly due to social distancing, business closings or quarantines, but purchases are still happening.

If you've lost income: Reach out to one of our Loan Officers in order to determine what you may qualify for based on remaining income or benefits.

Accessing Assistance:

The CARES Act provides unemployment benefits for most types of workers (including independent contractors and gig workers). The Act both supplements and extends state employment benefits.

Until September 2020, government backed student loans are no longer accruing interest. The entire amount you pay each month will go toward your loan balance. Through a formalized forbearance program you set up with your servicer, you may be able to postpone some payments.

Some landlords are working with tenants to delay rent payments. Contact your landlord to work out and document a plan if you anticipate the need for special arrangements.

Some creditors also are offering special accommodations. Several car companies and private student loan companies, for example, have announced programs for affected borrowers.

Are you expecting a Federal tax refund? Remember, there's no need to wait until the extended July 15 deadline to file!

Most important: DO NOT just skip or reduce payments to your landlord or any creditor. Reaching out to formalize your agreements will help to minimize or even prevent negative effects on your credit score.

Prioritizing Spending

Feeding your family and meeting immediate needs comes first, of course. Go ahead and cut unnecessary spending where you can.

As far as debts and obligations go, in typical times, a home mortgage lender looks most closely at the timeliness of your rent payment. Larger debts such as car payments or student loans come next, then revolving accounts such as credit cards.

However, these are not typical times. Work with creditors and your landlord to get accommodations where you can, then prioritize accordingly.

The CARES Act intends to prevent credit reporting for certain missed, late or reduced payments during the crisis. Intent does not automatically change the systems required to make this work seamlessly, however. By working out and documenting plans with those you owe, you will be more likely to avoid negative impacts to your credit score.

As always, we'll be on the lookout for any help or relief from the government in the form of waivers or special home financing programs. In the meantime, please reach out with your questions. We're here to help.

 

 

"Buy a Home", "First-Time Buyer", Misc