Mortgage forbearance, or when you pause your mortgage payments for a limited time period, is a great option for homeowners struggling to make their monthly payments. Although it doesn’t mean your payments are forgiven or erased (you’re still obligated to repay any missed payments eventually), it’s a solid way to regain financial stability in the meantime.
According to Nasdaq.com, 2.8 million American homeowners currently have their mortgages in forbearance, so don’t feel ashamed if you need to do the same. Forbearance is more common than ever before, and it’s a great option for struggling homeowners.
Still not convinced? You can learn more about forbearance by browsing some forbearance FAQs below.
What is mortgage forbearance?
Mortgage forbearance is when your lender allows you to pause your mortgage payments for a limited time period.
Am I eligible for forbearance?
If you’ve experienced financial hardship due to COVID-19 and you have a federally backed loan (Fannie Mac or Freddie Mac Conventional, FHA, VA, USDA, etc.), you may be eligible for mortgage forbearance.
Do I have to prove financial hardship in order to qualify?
No, no documentation or “proof” of financial hardship is currently required to qualify for mortgage forbearance. However, if you can continue to make your mortgage payments, you should.
How do I apply for forbearance?
Call your current mortgage servicer for more details on forbearance.
How long does forbearance last?
Typically, an initial forbearance plan usually lasts 3-6 months. However, if you need more time to recover financially, you can request an extension – Most loans can be extended up to 12 months, and some loans may be eligible for up to 18 months.
Will I have to pay back all of my skipped payments immediately once my forbearance period ends?
No. While it’s important to note that you’re still obligated to repay all of your missed payments, you will never be asked to pay back your forbearance in a lump sum. There are several gradual repayment options available.
Will I be penalized in any way for entering forbearance?
Forbearance programs do not typically have any hidden downsides or penalties. Each mortgage is different, but forbearance won’t usually add any extra fees or additional interest to your loan.
Is forbearance right for me?
The best way to determine if forbearance is right for you is to speak to a licensed mortgage lender. Call your current mortgage servicer for more details on forbearance.