What Should Military Homeowners Do If They're Late on Their Mortgage?

Sometimes challenges arise that result in financial woes that may put homeowners in a situation that makes paying their mortgage a problem. This can be an issue for current servicepersons and military veterans who can experience permanent life changes with little to no notice.

However, there are assistance programs that help first-time military homebuyers and long-time owners get back on track with mortgage payments.

The Department of Veterans Affairs or the official lender may be willing to work with mortgage holders who risk losing their homes to foreclosure due to financial shortages. Keep reading to find out what military members can do when to catch up when they're late on mortgage payments.

For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.

VA Loans Versus Conventional Home Loans

Before diving into solutions, it's essential to know the difference between a conventional mortgage and one backed by the VA. Rates are often lower with VA-backed loans. Usually, no down payment is required, and there is typically no need to pay extra for private mortgage insurance.

Even with these savings, making payments for military families can be overwhelming at times. That being said, the VA tends to have a more lenient lending policy and offers veteran benefits for home loans.

Reach Out to Lenders ASAP

Ignoring the issue can result in dire consequences. As soon as loan holders realize that they are late making payments, they should notify their lender of their circumstances. Sometimes, arrangements can be made that work for both parties to resolve the issue, such as a short suspension or reduction in payments without facing any penalties.

Another alternative that VA loan holders have is to ask for a forbearance that modifies the existing payment schedule. This allows those getting behind on their mortgage a chance to get back on their feet financially. Be advised that written acceptance of the agreement is necessary to protect the buyer and lender's interests.

However, one must ask the company who issued the loan, but federally backed VA loans provide a unique opportunity. The issuer must grant a forbearance if one is requested due to hardships. No need for proof of finances is demanded, only a written statement of request. Remember, this doesn't get owners out of making payments beyond the agreed-upon terms. Failure to pay can result in foreclosure on the home.

Financial Counseling to Help Military Members & Veterans Avoid Foreclosure

The Department of Veterans Affairs is there to help those behind on payment with a special financial counseling program. This benefit is available to those whose mortgage isn't a VA-specific home loan. There are dedicated VA Loan Technicians that are free to consult with when needed. Request a representative directly through the VA concerning trouble making home payments.

Options After Missing One or More Mortgage Payments

Depending on how many payments are missed, there are a few options that can help get servicepersons out of the hole, in addition to asking for a special forbearance to obtain more time. Some buyers can deal with lenders to make payments of additional sums each month once they are in a better financial situation.

On many occasions, lenders are willing to refinance or modify loans, which can help absorb missed payments. This lets the buyer get back to making regular mortgage payments without fear of losing their home. In certain situations, buyers may sell the dwelling privately or through a short sale to avoid foreclosure.

Short sales are a good last resort for many, especially if they owe more on the loan than the home is worth. It's essential to make arrangements to sell with their current loan holder. One final alternative is to obtain a deed instead of foreclosure, which requires owners to sign over their title to the lender taking over the property should no payment solution be workable.

Act Fast When Mortgage Payments Are Late

It's essential to work with a military relocation professional, the Department of Veterans Affairs, and loan holders to resolve any missed or late mortgage payments. Don't face these issues alone when so much free assistance and programs are available for current and former military personnel.

For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.