What is Mortgage Forbearance?
Mortgage forbearance is an agreement between a homeowner and their mortgage servicer that allows the homeowner to temporarily pause or reduce their mortgage payments. This is typically done when the homeowner is experiencing a financial hardship, such as a job loss, illness, or other unexpected expense.
During the forbearance period, the homeowner is not required to make full mortgage payments, but they may still be responsible for making partial payments or making up the missed payments later on. The specifics of the forbearance agreement will vary depending on the lender and the homeowner’s individual circumstances.
Benefits of Mortgage Forbearance
Here are some potential benefits of pursuing mortgage forbearance:
- Relief from immediate financial pressure
If you’re facing financial hardship and struggling to make your mortgage payments, forbearance can provide some relief and help you avoid default or foreclosure.
- Protection of credit score
Falling behind on mortgage payments can have a negative impact on your credit score. By pursuing forbearance, you may be able to protect your credit score and avoid long-term damage.
- Time to get back on your feet
Forbearance can provide you with the time and breathing room you need to get back on your feet financially. This can be especially important if you’re dealing with a temporary hardship, such as a job loss or medical issue.
Risks of Mortgage Forbearance
It’s important to understand the potential risks of pursuing mortgage forbearance as well. Forbearance may result in additional interest charges, fees, or a longer repayment period. Additionally, forbearance may not be available to all borrowers, depending on the lender and the circumstances.
Working with a Mortgage Professional
If you’re considering mortgage forbearance, it’s important to work with a trusted mortgage professional with a top mortgage broker, or top lender who can help you understand the terms of the agreement and the potential risks involved. A top mortgage broker or top lender will be able to answer your questions and provide you with guidance on whether forbearance is a good choice for your particular situation.
At Prime 33, our experienced mortgage professionals can provide you with personalized guidance and support as you navigate the mortgage forbearance process. Contact us today to learn more about your options and how we can help.
