Mortgage Forbearance – What do you need to know?

About 8 million people have applied for mortgage forbearance so far. You might be wondering if you should do the same. 

What is Mortgage Forbearance?

Mortgage forbearance is the ability to defer your payments or lessen them for a specific amount of time through your current lender. This option is available to everyone and there are no qualifications. You don’t have to be going through a financial hardship to apply, but it may be more appealing if you are. 

What happens after the forbearance?

After your forbearance is over, you will need to start paying the back missed payments. This is decided by your lender and can be a balloon payment (owing all the money at once), modifying your current mortgage to include the missed payments, or creating a payment plan. 

What else do you need to know?

Going into Mortgage Forbearance does not affect your credit, but it will be noted that the loan is in forbearance. This can prevent you from refinancing your current home or purchasing a new home in the future. Fannie Mae and Freddie Mac are imposing a 24 month waiting period before you can refinance or purchase. 

If you have additional questions, please feel free to call or email me at (801) 871-3956 or mike@westridgefinancial.com. 

Watch my YouTube video explaining the topic.