Personal Finance

Two major mortgage lenders are rolling out assistance programs to help customers who have been affected by the government shutdown.

Congress and President Donald Trump have been at a stand-off over funding for a border wall. In all, about 800,000 federal employees are expected to be furloughed or working without pay.

Affected workers are already grappling with incoming bills. The U.S. Office of Personnel Management’s verified Twitter account posted sample letters for federal workers to use with landlords and creditors as they seek relief for payments.

At least two banks have stepped up to provide federal employees with some help.

Wells Fargo said it will consider reversing overdraft fees for customers whose income has been disrupted due to the shutdown. Further, mortgage, loan and credit consumers may qualify for forbearance or other payment assistance programs.

What exactly consumers can qualify for will depend on their individual circumstances, said Tom Goyda, a spokesman for Wells Fargo. Click here for more information on the bank’s program.

In addition, Bank of America has also offered some help for affected clients.

“Our Client Assistance Program is available and designed to help clients experiencing financial hardship,” said Lawrence Grayson, a spokesman for Bank of America.

The relief that consumers can receive will depend on the particulars of their situations, but may include fee waivers, loan modifications and more, he said. Consumers can call the bank’s assistance line at (844) 219-0690.

Click here for a list of federal agencies and their contingency plans amid the shutdown.

Here’s how federal workers can shore up their finances and get through any lean times ahead.

Get in touch with the federal agency you work for to determine whether you are being furloughed and find out what resources are available.

In some cases, federal credit unions are offering furlough relief loans to help affected workers remain afloat in the short-term.

For instance, the Congressional Federal Credit Union has a relief line of credit with an initial rate of 0 percent for 60 days. After that, the rate on the remaining balance is 4 percent.

If you’re about to be less flush this month, draw up your monthly budget and see what you can slash during the shutdown, said Marguerita M. Cheng, a certified financial planner and CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland.

If you have outstanding loans, including mortgages and student debt, be sure to contact your creditors to make them aware of your situation.

“Most agencies also have a process in place for employees that they can use to reach out to creditors and landlords to ask for some relief,” said Patrick Amey, a CFP at Aspyre Wealth Partners in Overland Park, Kansas.

If you’re unsure about your next paycheck, this is the time to turn to your emergency fund as a backstop.

The standard rule of thumb is to maintain enough cash to cover three months to six months of expenses, said Bryan Beatty, a CFP and partner at Egan Berger & Weiner in Vienna, Virginia.

The next best alternative could be a zero-interest furlough loan or line of credit from a federal credit union, Beatty said. Remember, the zero-interest period runs for a limited amount of time — typically up to 60 days.

If you already have a home equity line of credit open and available for draw-down, this might be a potential source of emergency funding.

Consider that the average rate on a so-called HELOC is 5.64 percent, compared to the average credit card rate of 17.56 percent, according to Bankrate.com.

The downside of taking out a HELOC is that the interest rates tend to be variable. Further, if you’re using the line of credit for purposes other than renovating your home, you won’t be able to deduct the interest on your taxes.

Not all pots of cash are there for the taking.

For instance, a loan from your retirement plan would put a dent in your long-term savings. You’ll also need to repay the cash or else face taxes on the amount you borrowed.

Another source of cash to avoid would be credit cards and cash advances. Interest rates exceed 17 percent on credit cards, while cash advances could have up to 5 percent in additional charges, according to MagnifyMoney.

Finally, margin loans — in which you borrow from your brokerage account — could deal a significant blow to your finances.

That’s because your brokerage firm will require you to maintain a minimum balance in your account when you borrow against your investments. In the event of a sharp market decline, your balance could fall below the required minimum.

In that case, your brokerage firm will make a margin call and you could have less than 24 hours to deposit even more cash into your account or else the firm will sell your holdings.

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