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The Biden administration announced new mortgage relief options for homeowners with federal government-backed mortgages. (iStock)

The Biden administration announced on Friday that it will provide assistance to borrowers who have delayed mortgage payments due to the COVID-19 pandemic to help prevent foreclosure on mortgages.

President Joe Biden said that for homeowners with loans from the Department of Housing and Urban Development (HUD), Department of Agriculture (USDA) and Department of Veterans Affairs (VA), the administration will provide a 25% reduction in monthly principal. and interest payments. This is so that they can afford to stay in their homes and continue to foster equality.

If you’re struggling to pay off your mortgage payments in the aftermath of the coronavirus pandemic, mortgage refinancing is another option. Check out Credible if you’re curious about what’s available for mortgage refinancing. and how to reduce monthly payments.

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The administration’s announcement follows previous government aid that has been offered to homeowners. At the end of June, the administration extended the ransom moratorium for the last time before July 31, and also until September 30 until September 30. It also added up to three months to its version of the abstinence plan for some borrowers with mortgages supported by the Department of Housing and Urban Development, Department of Agriculture. and the Department of Veterans Affairs.

If you are in financial difficulty and want to know what options you have, you should consider refinancing your mortgage as it can save you hundreds in monthly payments. Visit Credible to compare multiple lenders right away and see which one works best for you.

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The Biden administration is now offering borrowers loan modifications and payment cuts to help them stay in their homes.

“Many homeowners will need deeper assistance due to the loss of income due to the pandemic,” the administration said in a statement. “For example, due to the economic crisis caused by the pandemic, some homeowners are earning less than they were before the pandemic.”

The administration explained that a 25% cut in principal and interest payments would result in fewer foreclosures in the coming months and would bring these government-backed loans in line with options offered for loans from Fannie Mae and Freddie Mac.

In the coming months, the administration is initiating the following mortgage facilitation options for FHA-supported mortgages:

  • Offline Partial Claim for COVID-19 Recovery: This option is for homeowners who can resume their current mortgage payments by offering them subordinated liens at 0% to pay off missed payments that can be reclaimed at the end of the mortgage, such as when selling or refinancing a home.
  • COVID-19 recovery modification: If homeowners are unable to renew their monthly payments, mortgage services can extend the term of the mortgage to 360 months at the market rate with the goal of reducing their monthly mortgage payments by about 25%.

Another way to cut your mortgage payments and help you save is to refinance your home loan, especially with interest rates hovering near historic lows. Visit Credible to see what options are available and pre-qualify without affecting your credit rating.

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For the USDA and VA options, the administration has provided new alternatives such as interest rate cuts, term extensions, and mortgage advance payments to cut payments by about 20%.

Homeowners with FHFA-backed mortgages can already get help by choosing to defer missed payments until the end of their mortgage, change the terms of the loan, extend the mortgage to 40 years or more, potentially reducing their payments by up to 20%. …

Borrowers should check with their mortgage lender or support staff to find out what options are available to them. They can also contact Credible to speak with a home loan specialist and get answers to all your questions.

Have a financial question but don’t know who to contact? Write to a safe money expert moneyexpert@credible.com and your question can be answered by Credible in our Money Expert column.

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