The government has truly stepped up to assist many Americans who are finding themselves unable to pay their debts as a result of the COVID-19 pandemic.
This assistance includes stimulus checks that are given to individuals and families to help pay for much-needed items as well as partnerships with the banks that allow many families to hold off on their mortgage payments through forbearances. What you might not know is that there is a huge difference between mortgage payments that are placed on forbearance and those that are deferred.
When your mortgage payments are deferred, this means that you are allowed to miss payments month to month and then have the payments that you missed added on to your overall mortgage on the back end. However, forbearance means that the months that you missed will have to be paid in full once the forbearance period is over.
For example, if you did not pay your mortgage for three months, then you will be required to pay all of those months, plus the current month, at one time. This is where a lot of Americans are failing to read the fine print, and as a result, they will pay with blood.
Many of the mortgage companies are hoping that Americans are not paying much attention to this very important detail. At the end of the day, we must remember that the banks are corporations that are in the business to make money.
Although we are all suffering from the current pandemic, many of the banks are simply pushing your payments back a few months and then making you pay all of the missed payments at one time. This is most unfortunate because if people couldn’t pay their rent for the first three months, then what makes the bank believe that they will be in a position to pay for all months missed at one time? This is how the bank ensures that it will make its money.
When you accept a “deal” from any debt collector, you must make sure that you read the fine print. Although there are a few banks that will allow payments to be deferred, you must understand that this is not the case with all banks. Make sure that you understand the consequences that are associated with any “relief” that you are given from your creditors.
They might not always tell you everything that you need to know up front because they know that it is still your responsibility to know everything on your own prior to signing on the dotted line. You must still do your research and ask the important questions prior to accepting certain relief packages. This includes any package from a bank that provides you with an opportunity to hold off on any mortgage payments. If it sounds too good to be true, it probably is.
In the end, we are all feeling the heat from this pandemic with job loss and the depletion of our finances. Be sure to take advantage of any and all opportunities to save money, defer debt, and remain calm. Remember…it’s the frantic mind that often misses the important details. Always cover yourself by learning as much as you can about any COVID-19 relief being offered so that you can come out on top.
By Audra L.