If you have a VA loan, the U.S. government has options in place to assist you in case of financial hardship. There are multiple programs available to help you avoid late payments and foreclosure if your mortgage meets eligibility. Here are the major veteran mortgage relief options to know:
Refund Modification
A refund modification affects the principal and interest on your existing VA loan. This option allows the Department of Veteran Affairs to purchase any past-due payment and principal loan balance, given the amount falls within certain limits. Refund modification can result in an overall reduction of both principal and interest by up to 20%.
Partial Claim Option
A partial claim program helps cover you in a scenario where you can make current payments, but have accrued a past-due balance. With a partial claim option, you can resume your regular monthly payments again as soon as you're financially able, while any unpaid late payments are taken over by the VA. You'll owe the amount at the end of the mortgage, but it will not accrue interest while the VA holds it.
Loan Deferment
Loan deferment is one of the simplest mortgage relief options available to veterans. A loan deferment creates an agreed-upon period when you don't have to make regular payments on either principal or interest. It's essentially a "pause" on your mortgage until the end of the deferment period, without any interest accruing during the deferment time.
Forbearance
Loan forbearance is very similar to deferment with one crucial difference. If you receive loan forbearance, you can pause making your mortgage payments for an agreed-upon time period, but interest will continue to build. While forbearance can be an excellent way to mitigate financial hardship in the short term, it can sometimes result in paying higher than the original required amount due to the continuing interest.
All of these options are great ways to avoid foreclosure and late mortgage payments. Remember these programs if you need mortgage relief.
About the Author
Linda Cappello, Broker, GRI, ABR
Linda A. Cappello, Owner/Broker of Cappello Realty Shoreline Properties. Cappello Realty is a full service boutique Real Estate firm that specializes in 06855 - East Norwalk, and services all of Norwalk and Fairfield County, CT. Linda has been in the Real Estate business for 20+ years, spending 18 of them as a Owner/Broker. Being a Broker adds a lot responsibility to her job. She is responsible for overseeing every transaction and agent in the office. This is a challenge that she looks forward to and takes very seriously. She is constantly taking continuing education classes and attending seminars to keep abreast of the ever changing market as well as the industry standards, rules and regulations.
She is a native to East Norwalk, and has an in-depth knowledge of the city that she loves, as well as the intricacies of the many unique neighborhoods and areas that Norwalk offers. Linda offers her clients a network of professionals ranging from Attorneys, Mortgage Brokers, Home Stagers and Home Inspectors to any and all pros that you may need for a successful transaction and for the convenience of her clients.
"My job doesn't end at the closing table. It goes far beyond that, keeping in touch and staying friends who refer their family and friends. A lot of my business is referral business which is the greatest accomplishment and honor of all. Earning my clients trust."
