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Should I Do a Mortgage Forbearance?


We’ve heard a lot about mortgage forbearance this past year during the coronavirus pandemic, but many people may not fully understand what mortgage forbearance is and how it can be used by homeowners who are struggling financially.

Before deciding if forbearance is right for you, it’s important to fully understand your options and obligations when entering into forbearance. If not careful, forbearance may lead to further credit challenges down the road.

What is mortgage forbearance?

Forbearance is when your mortgage servicer allows you to temporarily pause or reduce your loan payments for a certain period of time (generally for less than a year). Forbearance does not eliminate any payments or erase your obligation to pay. Rather, it shifts those missed payments to the future and you will have to repay them when the forbearance period ends.

How does mortgage forbearance repayment work?

When the forbearance period ends, homeowners will be responsible for paying back any missed or reduced payments that accumulated during forbearance. With your lender, you will determine which repayment option is right for you, including:

  • Lump-sum repayments – you may elect to repay the entire missed payment amount in one single repayment.
  • Payment plan – you may create a payment plan that includes making larger monthly payments to your lender until you are caught back up on your loan.
  • Loan modification – you may seek a loan modification that changes the loan terms. This may include making changes to the interest rate, loan term or both.

Consider your options

Forbearance provides much-needed relief to homeowners who are facing temporary financial challenges. Additionally, forbearance does not affect your credit. However, it is important to be attentive once your forbearance period ends, as you could run into credit challenges if you are unable to keep up with the repayment terms.

As you consider your options, assess your current and potential future financial situation. Will you be able to afford larger monthly payments in the future? Will the temporary relief you get in forbearance allow you to regain your financial footing so you can get back on track with your loan?

Before seeking forbearance, understand your options and their implications and ask for help. There are many foreclosure resources for Floridians, and our team at Jacobs Legal is always here for you too. Call us at 305-358-7991 anytime for help.

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