For those struggling, know that you aren’t alone. Feeling like you don’t have money to pay rent or make a mortgage payment is scary. But you do have options. Millions of Americans are facing hardships as the result of the pandemic, and with housing being the biggest monthly expense for most people, payments have become steadily more difficult to make.
If it is happening to you, try to stay calm and know that you do have options. Here’s what to do if you can’t pay rent or make your mortgage payment:
What To Do if You Can’t Pay Rent
As soon as you realize you won’t be able to make your rent payment on time, take action. You have options, but the earlier you act, the better the outcome will be.
Know your rights
If the pandemic has impacted your ability to work, you may have both federal and state protections on your side. The Centers for Disease Control and Prevention have issued a temporary halt to some evictions. The Federal Housing Administration has placed restrictions on evictions at FHA-backed single family homes. Many states have also put eviction memorandums in place that allow you to temporarily forgo or pay less rent.
If you don’t have money to pay rent, contact your local housing authority. They can help you decide what protections are available to you.
Communicate with your landlord
For many people, unemployment pay and stimulus checks aren’t enough to cover rent and living expenses. Reach out to your landlord right away and let them know the situation. Be honest and upfront and provide all documentation that you can, like a furlough or layoff letter.
Be prepared for mixed reactions. Your landlord has bills to pay as well and might be relying on your rent payments. By being honest and upfront with your landlord hopefully they will understand your situation and be willing to work together towards a solution that works for both parties.
Work out a payment plan
Are you able to pay a reduced rate? Try to negotiate a payment plan with your landlord. Provide the amount you can pay each month, the due date, and a date when the remaining rent would be repaid. Of course, the pandemic situation is ever-changing, so be realistic when setting that date. Be sure to keep a record of this conversation through email or letters, so you can reference it if needed.
Look for charitable help
Look to your community for support. Though you might feel compelled to shy away from this option, remember that this situation is temporary, and it’s OK to lean on others for support when you need it. Reach out to the Salvation Army, Catholic Charities USA, or United Way and inquire about rental support.
The U.S. The Department of Housing and Urban Development website offers links to rental assistance resources and state financial assistance that you might qualify for. If you or someone in your household is a veteran, HUD and U.S. Veteran’s Administration has programs that help with rent.
What To Do if You Can’t Pay Your Mortgage
Not making your mortgage payments can have lasting consequences to your life and your credit score, but you have options. Here is how to get help.
Contact your lender
Financial planners are encouraging homeowners under financial stress to reach out to their lender directly and discuss payment options. Lenders are required in most circumstances to work with you, and in light of COVID-19, many states have put their own measures in place as well. If your lender refuses to work with you, consider reporting them to your state’s attorney general’s office or the Consumer Financial Protection Bureau.
Contact your bank
Many banks are offering hardship programs that could help ease your situation. In most cases, you will need to first call and ask to apply. Also be sure to read the fine print before accepting any offer.
Consider a personal loan
Rates for personal loans are at an all-time low, and it’s easier than ever for Americans to borrow funds to hold them over. Keep in mind, making sure you can pay back the loan over time is essential for maintaining good credit. Only consider this option if you know this setback is temporary and you’ll be able to begin paying for your mortgage and repaying your loan soon.
Look into loan forbearance options
Though not ideal, forbearance is a hardship option that lets you postpone payments during financial difficulty. Although this provides immediate relief, your interest will continue to accrue and your principal balance will stay the same, meaning you’ll be paying more in the long run. Before you choose this option, ask your lender what terms they can offer. If you’ve been making steady payments until now, you might be able to get a better deal.
Remember, millions of Americans are feeling financial hardships. You aren’t alone, and you do have options to help you make it through these difficult times.