Forbearance can be a tool to provide relief to financially-challenged homeowners. However, it is vital to understand the implications of this strategy.
Forbearance occurs when your mortgage lender allows you to reduce or pause your payments for a short period of time. For homeowners going through a hardship or job loss, forbearance can be a critical option that allows them to keep their home. Unfortunately, forbearance does not erase your debt; you still have to repay any missed or reduced payments at the end of the period.
Forbearance is negotiated between the borrower (homeowner) and the mortgage lender. To see if you qualify, contact your mortgage lender immediately to discuss what forbearance options may be available to you. Be ready to outline (in detail) your current situation – you are your best advocate when it comes to seeing if you qualify.
· Things to discuss with your lender: length of forbearance period and terms of repaying the loan
· Forbearance does not erase debt — any missed payments are due
· You will likely have a large bill due all at once when the reduction period is over
Forbearance often allows homeowners the relief they need to get back on their feet and continue regular payments.