fbpx

Mortgage Forbearance

Many homeowners have been inclined to pursue forbearances to skip mortgage payments. While this may be a viable option for those in need, it is not a viable option if you are attempting to refinance or purchase a new home in the near future.

To qualify for a forbearance, a client must claim a significant financial hardship as a result of COVID-19.  It is our professional opinion that if you have the ability to make your mortgage payments, then you should continue to do so without question.

Due to the restrictions placed on lenders by Fannie Mae, Freddie Mac, and Ginie Mae, GSHL will unfortunately not be able to complete a refinance, nor purchase of a home, for any client who is currently in forbearance, or who has applied for a forbearance.

CARES Act Mortgage Forbearance: What You Need to Know

FAQs

What is Mortgage Forbearance?

Forbearance is when your mortgage servicer or lender allows you to temporarily pay your mortgage at a lower payment or pause paying your mortgage. You will have to pay the payment reduction or the paused payments back later.  Forbearance can help you deal with a hardship, such as, if your home was damaged in a flood, you had an illness or injury that increased your healthcare costs, or you lost your job. Forbearance does not erase the amount you owe on your mortgage. You will have to repay any missed or reduced payments.

Does forbearance mean I never need to make up the missed mortgage payments?

No, the deferred payments still need to be made in the future, as a lump sum or tacked on to the end of your mortgage. Forbearance is not the same as loan forgiveness.

Can you refinance your mortgage during forbearance?

Due to the restrictions placed on lenders by Fannie Mae, Freddie Mac, and Ginie Mae, GSHL will unfortunately not be able to complete a refinance for any client who is currently in forbearance, or who has applied for a forbearance.

Rates are low. Should I refinance my mortgage?

Yes.  Now is a great time to refinance!  Rates are at historic lows and it could help you lower your payment, allowing you to pay your mortgage on schedule instead of going into forbearance.  Contact us today to talk about your options.

How do I repay my forbearance?

After your forbearance period ends, you will have to make arrangements to repay any amount suspended or paused.

Under the CARES Act, if you have a federally backed mortgage, you also can request an extension of the forbearance for up to an additional 180 days.

The method of repayment varies depending on your loan and the options offered. Not all borrowers will be eligible for all options. You should take steps to be aware of how these programs work and what you can expect in terms of repaying these amounts.

Generally, repayment of forbearance occurs by the amount being repaid:

  • In one lump sum at the end of the forbearance period
  • Added onto your existing monthly payments over a set number of months
  • Added to the end of your loan as additional payments or as a lump sum

Just as forbearance may differ between the federally backed agencies or entities, so does the repayment of the forbearances.

Will forbearance impact my financial future?

Your forbearance will be reported to credit bureaus. In order to be eligible for a new home loan after forbearance — whether a refinance or purchase — you’ll need to re-establish yourself as a credible borrower.

Skip to content