With unemployment rising and no clear timeline for the reopening of non-essential businesses, many people are worried about how they can make ends meet for the next few months and beyond.
One option to consider for financial relief is your mortgage.
Despite almost certainly being your largest budget item, your mortgage is an asset that offers possibilities for restructuring. Here are four ways you can tap into your mortgage to ease financial stress:
- Mortgage Refinance (Refi) Loan. There are several reasons to consider a refinance of your mortgage right now. While many people traditionally refinance to reduce the terms of their loan or drop years of payments, this is a perfect time to reduce your monthly payment by locking in at a lower interest rate than your current mortgage. You can roll the closing costs into the loan for little-to-no upfront costs. And as an extra bonus, you skip one month of mortgage payments during the process.
- Cash-out Refinance. Another type of mortgage refinance loan enables you to cash out some of the equity in your home. This might be a way to cover some unexpected costs if you don’t have any cash reserves, like an emergency fund, saved up.
- Home Equity Line of Credit (HELOC). A Home Equity Line of Credit is a good option if a mortgage refinance would require raising your current interest rate. Instead, you can tap into the equity you have built up in your home over the years. In more typical times, a HELOC might be used for a home improvement project. A HELOC gives you access to money if you need it but can sit unused as a backup plan if you are able to make ends meet. In other words, it can serve as a safety net, as needed, up to a certain limit.
- Mortgage Forbearance. State Bank of Cross Plains does have an application available online for customers to request a forbearance review, to make reduced or no payments for a specific period of time. You can also contact our mortgage assistance center online or at (608) 798-5207 or (877) 775-9411 with questions.
Resources and Information
You might be feeling overwhelmed and wondering where to start. Below are some resources and contacts to help you navigate the process.
First, there are a few things to note regarding the options above:
- Be aware of your current interest rate on your home mortgage loan. For a refinance to help relieve financial stress, you need to be able to refinance at a lower rate.
- You will still need to qualify for a new loan, just like always. If you are experiencing a significant change in income, a refinance may not be a viable option at this time. In this situation, we encourage you to have a discussion with your lender about deferment or other mortgage assistance.
To learn more about refinancing your mortgage, start on our website or call (608) 497-4640.
To learn more about a HELOC, get information on our website or call (855) 256-7328.
For information about mortgage assistance and deferments, start here or call (877) 775-9411.
The most important thing to remember is that we are here for you. These are unprecedented times. If you need help, we will do whatever we can to assist you.