It’s no secret that the COVID-19 pandemic changed the way we think about how business is conducted and how our current economy is organized. Many Americans unfortunately lost their jobs or were otherwise unable to earn their normal salary — so much so that the federal government had to step in and implement moratoriums on evictions, rent, student loans, and mortgage payments.
But now, as those measures near their expiration dates, many homeowners are left wondering what may happen and where they can turn.
How Do Mortgage Forbearance Programs Work?
When many sectors of our economy shut down last year, the government and mortgage lenders implemented emergency programs that allowed homeowners to defer mortgage payments, sometimes for up to 18 months, because many of them were out of work. This lifted one of the more significant financial burdens during a time of crisis, but it was only a temporary measure.
But were these programs successful? In many aspects, yes. According to CNBC,
“Over half of the 7.7 million borrowers who piled into bailout programs are currently (sic) on their mortgages and making payments again. . .About 23% of borrowers either sold their homes or refinanced their mortgages to make them more affordable. Roughly 7%, or just over half a million, are in active loss mitigation with their lenders, still trying to work out a loan modification plan.”
But for an all-too-significant percentage of people, these programs were not the saving grace they were intended to be. An estimated 264,000 homeowners are now considered delinquent on their mortgage payments after their forbearance period expired, while around 38,000 are in active foreclosure. Furthermore, many homeowners are becoming nervous as their forbearance period ends because their job has not yet been fully restored.
What are My Options If My Forbearance Period is Ending?
While the situation may sound dire, there are some options if you find yourself among the many Americans that are financially unstable and forbearance is ending:
- Work with your lender: lenders generally don’t want to hound you for payments just as much as you don’t want them hounding you for payments. Getting in contact with them and explaining your current situation can actually help. You may be able to negotiate a lower interest rate, receive advances for taxes and insurance expenses, or reconfigure your payment periods.
- Sell your house: despite working with a lender, some people simply aren’t able to pay. This could be because they lost their business entirely, they’ve been laid off and unable to find work, or any number of reasons. If desperation is kicking in, you may be able to sell your house. Thanks to run-on housing during the pandemic, home prices are up by an average of 20%, meaning the vast majority of homeowners now have positive equity in their home.
- Sale-leaseback program: however, if you do not want to sell your house and move out of your community, you can participate in a sale-leaseback program. This program is a way for you to utilize your home’s equity in order to pay for life’s expenses such as mortgage payments, medical bills, insurance, etc.
How Does a Home Sale-Leaseback Program Work?
SKYDAN Equity Partners provides the premier home sale-leaseback program in Illinois, Indiana, and Wisconsin. First, we buy your home for a lump sum of cash, with which you pay off existing debts (property taxes, credit card debt, medical bills, etc.). You then lease the home back from us for up to 24 months with deferred rent payments. This means that while you’re leasing your home back from us, there are no monthly payments, no interest paid, and no added debt.
At the end of the 24-month period, you have two options:
Purchase the home back (original price + deferred rent) OR sell the property, keeping all additional equity.
We don’t care about your credit score, employment history or debt-to-income ratio. We are here to help you break the cycle of debt, not add to it as traditional home loans do. The only thing you need in order to qualify for our program is to have enough equity in your home. If you need to tap into your home’s equity.
SKYDAN: When Banks Say No, We Say Yes
Home sale-leaseback programs have been on the rise throughout the country and have shown to be successful in helping struggling homeowners pay down their debt. SKYDAN Equity Partners’ program has a few key differentiators from other similar programs:
- SKYDAN’s program doesn’t negatively affect your credit score
- You get to remain in your home throughout the duration of the program
- There are no monthly payments
- You decide whether you want to sell your home or stay in it at the end of the program
Our mission is to help homeowners access equity in their home to pay for life’s expenses, improve their credit, and set them up for long-term financial success. When banks say no, we say yes.