With the $600 per week federal unemployment benefit set to expire at the end of July, homeowners are becoming increasingly worried about covering their mortgage payments.
According to a new study by OnePoll and the National Association of REALTORS, eight in ten American homeowners have experienced financial hardship due to the COVID-19 pandemic. More than half are routinely concerned about making their mortgage payments and 47 percent have considered selling their home because they can no longer afford it.
Over half of the 2,000 respondents said they have reached out to friends or family about borrowing money for mortgage payments. Fifty-six percent have had to cut back on other expenses in order to pay their lender on time, reducing spending on clothing (71 percent), take-out (66 percent), streaming services (46 percent) and groceries (45 percent).
Forty-seven percent have turned to alternative revenue sources, such as taking up a side hustle (64 percent) or selling personal items (53 percent).
Additionally, 35 percent have skipped or missed a mortgage payment due to the ongoing crisis. This is known as mortgage forbearance and it allows homeowners to make reduced payments or defer them completely for up to one year.
Approximately 4.2 million borrowers are currently in forbearance, totaling 8.48 percent of all mortgage loans, according to the latest figures from the Mortgage Bankers Association.
Although there are options for homeowners in need of mortgage relief, nearly 3 out of 4 people surveyed don’t fully understand the effects of forbearance and the terms of repayment. Furthermore, 71 percent of homeowners worry they won’t qualify for such programs.
“Realtors and lenders can identify programs and aid designed to help meet loan obligations,” said National Association of Realtors President Vince Malta. “Acting quickly may help homeowners stay in their homes and keep the money they have already invested into it.”