2020 was a hard year for most of us, with no direction, just a road filled with smoke and fog. One of the problems that consumers encountered is how to pay their rent or mortgage. During difficult times, it is important for consumers to know their strategy in paying their mortgage. One of the options for this dilemma is forbearance.
What is Mortgage Forbearance?
A Mortgage Forbearance is a temporary postponement of mortgage payments granted by the lender or creditor. It is in lieu of forcing a property into foreclosure. The terms of a forbearance agreement are negotiated between the borrower and the lender.
In a forbearance agreement, the loan owner consents to the decrease or suspension of their payments for a set amount of time. The lender briefly decreases or suspends your regularly scheduled payments. It does not delete what you owe. You will need to repay any missed or diminished payments later on. Most of the time, this payment is a lump sum payment. However, you can ask, request, urge or beg your lender to put you on a payment plan. It is important to discuss all of this with your lender.
Is Forbearance the Right Options for you?
Depending on your situation or financial capabilities, you should ask yourself “Is forbearance the right option for me?” here are the scenarios that may qualify you for mortgage forbearance;
- You are behind on your mortgage payment
- On the verge of missing a payment
- Experiencing temporary hardship(e.g. Covid)
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How Long Does Mortgage Forbearance Last?
It usually last about 180 to 360 days depending on your circumstances, or your mortgage lender.
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It’s Up to You
During a pandemic, everyone is looking for ways to survive, even businesses. It is up to the individual and businesses to find ways to manage their mortgage. It’s up to you to ask your mortgage lender what options are available to you.