The current government administration has recently made financing and loan modification programs available for single parent- headed families needing to avoid foreclosure and remain in their homes. Single parents who are having trouble making monthly mortgage payments, or whose homes have decreased in value significantly, should actively consider one of the following options:
Avoiding Foreclosure Once You’ve Fallen Behind on Your Mortgage
It is still possible for single parents who have fallen behind on their mortgages to avoid foreclosure. Single parents must be proactive and not ignore the situation, which is sometimes easier to do in the beginning.
Single parents who have suffered significant hardships, such as divorce, job loss, and medical emergencies may qualify for assistance if the mortgage payment is more than 1/3 of their gross monthly income. A loan modification may be available through the “Making Home Affordable” program.
Single parents may want to contact their lenders to discover whether or not they might consider modifying the existing loan directly. For instance, lenders can lower interest rates and extend terms of loans, or reduce the principal owed on the loan. Many times, these types of loan accommodations are less costly to the bank than engaging in foreclosure proceedings which can be very expensive. That provides some incentive for lenders to cooperate.
Avoiding Foreclosure Before Falling Behind on Your Mortgage
Single parents whose mortgages are currently up to date may still anticipate falling behind in the near future. They may be concerned that income changes are going to occur or that there will be reductions in child support payments by the other parent. That makes it important to prevent making late payments or skipping them altogether.
Plummeting home values may prevent the home from being sold for more than what is owed. This is referred to as being “upside down on the mortgage”. Single parents in this may want to consider the following options:
· Refinance through the current administration’s “Making Home Affordable” refinancing program.
· Be wary of “no closing costs” refinancing options. These programs tack fees onto the loan balance and cost borrowers way more money over the life of the loan. However, if you are in an emergency and if it will help avoid foreclosure, the extra expense may be worth it.
There are other programs that offer assistance for single parents depending on which state a single parent resides in. HUD has several options and funds grants for various organizations to combat foreclosure. It would be wise to investigate these possibilities by inquiring with HUD or the local United Way.
Getting Started Searching for Grants and Funds
Some single parents may not qualify for certain types of grants. The best place to begin searching is the government’s site Grants.gov. This site lists all known available grants, the amount of funding that is available and all of the eligibility requirements.
Typical Eligibility Requirements
For most single parents to obtain mortgage assistance they must meet certain guidelines and conditions. Some of the common guidelines are the following:
· Single parents should be unmarried or divorced.
· Second parents must be absent through incarceration or death.
· Second parents should be physically or mentally incapacitated.
Most assistance programs also require single parents to show a positive credit history in order to qualify for financial assistance.
Possible Disqualifying Factors
Single parents may not be entitled to assistance if any of the following issues exist:
· The child or children in question does not reside with the single parent.
· The single parent is entitled to receive Federal pension funds.
· A domestic partner is financially supporting the single parent or child.
· The single parent is collecting funds for disability.
Sometimes evidence of foreclosure, bankruptcy, or even a previous mortgage delinquency may cause some single parents to be disqualified.
Receiving Assistance From Non-profit Organizations
It can be tough for single parents who have to go it alone when searching for assistance. Some single parents have found that non-profit advocacy groups can help them to secure funding for housing. These organizations may have more influence with the Federal government and may also employ experienced grant writers that work to secure large amounts of funding to be disbursed to large groups of single parents. In addition, to assistance with housing, these organizations may be able to provide assistance with other financial needs.