We’re all taking steps to protect each other during this difficult time – we’re staying in our homes, and as a result, we’re staying safe. The team at Your Mortgage Assistant understands just how important our homes are, and we’re committed to helping you the best way we can. Here are a few ways you can use this extra time to assess your finances and see where you could save money today and hopefully down the road after we make it through this.
Refinance Your Mortgage
If you’re lucky enough to be working from home and your income hasn’t been affected, now could actually be a great time to refinance your mortgage — interest rates are historically very low. The only caveat is that lenders have seen higher risk from the economic downturn during the pandemic, so it may be harder to get approved. If you are able to get approved, refinancing at a lower rate could lower your monthly payment amount, and help you spend less in interest over the life of the loan. To see how much you could save, you can use a mortgage calculator to figure out what your new monthly payments would be. Just don’t forget to account for any potential refinance costs.
Get Mortgage Relief
If you’re among the millions who have lost work or have been furloughed and are unable to pay your mortgage, or maybe can only pay a portion, contact your mortgage loan servicer immediately. There still may be ways for you to save money by not dipping into your retirement funds.
A new federal law, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, offers protections for homeowners with federally backed mortgages. If you’re currently experiencing financial hardship, you may be able to get forbearance — where you’re allowed to pause or suspend your mortgage payments while you regain your financial footing. You have a right to request a forbearance for up to 180 days, and the right to request an extension for up to another 180 days. You must contact your loan servicer to request this forbearance. If you don’t have a federally backed mortgage, you still may have relief options through your mortgage loan servicer or from your state.
Save on Home Insurance
Reducing costs associated with home insurance could potentially provide savings, even during this time. A simple way you could save money right now is by bundling your insurance. If you have auto insurance with one provider, but home insurance with another, contact your providers and see what discounts they may be able to offer if you bundle both policies with one company.
Some insurance companies will also offer discounts if you have a home security system. Contact your provider and see what kind of system would qualify for a discount. In the long-run, the savings in insurance premiums could outweigh installation costs, in addition to protecting your home.
Get a Home Warranty
With the economy essentially on hold right now, you may be worried about how you would pay to fix some of the big-ticket items in your home if they break down. A home warranty could provide you some peace of mind and, importantly, save you some money during this period of uncertainty. Unlike home insurance, a home warranty is a service contract (typically for 12 months) that covers the repair or replacement of important appliances and components that break down over time. For example, if expensive repairs are needed for your water heater or air conditioning system, a warranty could protect such items not covered by your insurance.