If you are struggling to make your mortgage payments, or if you are facing foreclosure, you may be wondering what options are available to you. One option that you may not have heard of is a partial claim mortgage. A partial claim mortgage is a special type of loan that allows homeowners to get their finances back on track and avoid foreclosure. In this blog post, we will explain what a partial claim mortgage is and how it can help you keep your home.
What Is a Partial Claim on a Mortgage Table of Contents
What Is a Partial Claim on a Mortgage?
A partial claim is a loan from the government that pays all or part of what you owe on your mortgage. The goal of a partial claim is to bring your mortgage current so you can keep your home and avoid foreclosure.
Partial claims are available through the Making Home Affordable (MHA) program, which was created by the Obama administration in 2009. To be eligible for a partial claim, you must:
- Be behind on your mortgage payments, but still living in your home
- Owe more than what your home is worth (be "underwater" or "upside down" on your mortgage)
- Have a good payment history before you ran into financial hardship
- Demonstrate a need for assistance
What Are The Benefits of a Partial Claim on a Mortgage?
A partial claim is when the government pays a portion of what you owe on your mortgage. The idea behind this is to help keep people in their homes during tough economic times. Partial claims can be very beneficial for those struggling to make ends meet.
Some of the benefits of a partial claim on a mortgage include:
- You may be able to stay in your home and avoid foreclosure
- The amount owed on your mortgage may be reduced
- Your monthly payments may be lowered
What Fees Come With a Partial Claim on a Mortgage?
The fees for a partial claim mortgage vary by lender, but they can range from $500 to $700. In some cases, the lender may require you to pay for an appraisal or title insurance policy. You will also need to pay any outstanding loan balance and closing costs associated with the mortgage.
Partial Claim mortgages are available through most major lenders, including banks, credit unions, and online lenders. If you're interested in pursuing a partial claim mortgage, be sure to compare rates and terms from multiple lenders to find the best deal.
Applying for a partial claim mortgage is typically a straightforward process. However, because each lender has their own guidelines and requirements, it's important to do your research ahead of time. Once you've found a lender that you're comfortable working with, the process of applying for a partial claim mortgage should be relatively easy.
What Are Some Alternatives to a Partial Claim on a Mortgage?
Some alternatives to a partial claim on your mortgage may be a loan modification, forbearance, or repayment plan. You might also be able to refinance your mortgage to get a lower interest rate and monthly payment. Another option could be to sell your home and use the proceeds to pay off your mortgage. Whatever you do, make sure you talk to your lender about all of your options before making any decisions.
If you're struggling with making your mortgage payments, don't wait until you're behind to take action. There are plenty of resources available to help you avoid foreclosure. The sooner you reach out for assistance, the better chance you have of keeping your home.
How Do I Qualify for a Partial Claim on a Mortgage?
If you are struggling to keep up with your mortgage payments, you may be able to qualify for a partial claim on your mortgage. This is a loan from the government that can help you catch up on your payments and avoid foreclosure. In order to qualify for a partial claim, you must:
- Be at least 90 days delinquent on your mortgage
- Have a good history of making payments on time
- Demonstrate a financial hardship
- Meet income requirements
What Is the Difference Between a Partial Claim and Loan Modification?
A partial claim is when the mortgage company agrees to add the past-due amount owed to the principal balance of the loan. This keeps the homeowner from having to make a lump sum payment to repay what is owed. A loan modification is when the mortgage company agrees to change the terms of the loan, such as extending the length of time you have to repay what is owed or lowering your interest rate.
Which One Is Right for Me?
If you are struggling to make your mortgage payments each month and are in danger of falling behind or being unable to catch up, a partial claim may be right for you. If you can afford your monthly payments but they are becoming more difficult due to a change in income or an increase in expenses, a loan modification may be a better option.
You should speak with your mortgage company to see what options are available to you and which one would be the best fit for your current situation.
What Are the Risks of a Partial Claim?
The biggest risk of a partial claim is that you could end up owing more money than what your home is worth if you eventually have to sell or refinance. This is because the unpaid principal balance will increase and, as a result, so will the amount of interest you owe on the loan. If property values decrease in your area, you could end up "upside down" on your mortgage - meaning you would owe more than what the home is worth. Before considering a partial claim, make sure you understand the risks and weigh them against your current circumstances.
What Are The Requirements for a Partial Claim on a Mortgage?
To be eligible for a partial claim, you must:
- Be current on your mortgage payments
- Show proof that you have experienced a financial hardship
- Have a loan originated before January 2010
You also cannot have filed for bankruptcy within the last year or had a foreclosure in the past three years. If you meet all of these requirements, you may be able to get help from your lender through what’s called a partial claim.
A partial claim is when your lender agrees to add unpaid interest and/or principal onto the end of your loan term. This allows you to pay off this debt over time, without having to make a lump sum payment. In order to qualify for a partial claim, you must provide documentation of your financial hardship to your lender.
If you are approved for a partial claim, you will be required to sign a promissory note agreeing to repay the amount of the partial claim plus interest over time. The terms of the repayment will be determined by your lender, but will typically involve monthly payments tacked on to your regular mortgage payments.
It’s important to note that a partial claim does not mean that you are off the hook for your mortgage payments – if you miss even one payment, you may be in danger of foreclosure. A partial claim is simply a way to help eligible homeowners stay in their homes while they get back on their feet financially.