Mortgages during Covid-19
The other day, I heard part of a conversation, on WGN, about mortgages. I believe the guest said that until September, all mortgage amounts are being paid toward principal, with no money going toward interest. He advised that if you were working and could pay more on your mortgage, this would be a good time to do it. Is it correct that all money paid toward your mortgage is going solely toward principal? This could be a good topic for a show. Thank you.
Terry Says
I think you’re confusing mortgage forbearance with student loan forbearance under the Care Act.
If you have a federally owned/guaranteed mortgage you may qualify for a forbearance program through your bank, delaying payments for up to a year. BUT, you will owe all that money at the end, including the interest.
Student loans are a bit different. There is a 6 month forbearance on FEDERAL (not private) student loans, during which no payments have to be made, and no interest accrues. But this does not reduce the amount of the loan outstanding. It will be tacked on to the end of the payment schedule. And also through September 30th, the Federal government is not pursuing Federal Student loan collections. But they won’t forget you!
