If you have found yourself struggling financially and cannot make your monthly mortgage payments, you may want to consider mortgage forbearance.
One thing in life that is for sure is that life is ever-changing, and your circumstances can alter in an instant. Whether you are suddenly unemployed or experience a medical emergency, you might find your situation to be a bit different, especially in terms of finances. If you are struggling to make payments on loans, including your mortgage, you are not alone. Countless Americans are skipping payments on their looming bills thanks to the current economic situation. Thankfully, many banks are willing to work with those who find themselves in financial distress due to the pandemic: mortgage forbearance.
Continue reading below to learn more.
Mortgage Forbearance 101
If you are not familiar with mortgage forbearance, let us give you a brief overview. A forbearance is a contract or agreement made between a homeowner who cannot make payments towards their loan and their mortgage lender. Forbearance allows for a small “grace period” where the mortgage payments are either reduced or suspended for a certain amount of time so the borrower can get on their feet again while avoiding foreclosure. This option is meant for people facing temporary financial hardships and should not be considered a long-term solution. In extreme situations, a lender might be willing to extend the forbearance agreement to allow more time.
How Does Forbearance Work?
Forbearance does not permanently eliminate the need to make mortgage payments and is not an indefinite solution. It does, however, offer temporary relief in terms of the payment amount or due date. The homeowner is still responsible for their contract’s initial terms, but forbearance allows for a short pause while the borrower works towards re-establishing financial stability.
Forbearance agreements are not a one-size-fits-all plan and will look different case by case. Some contracts require the entire lump sum to be fully paid by a certain date, while others offer a more flexible payment schedule to borrowers. Given the current situation experienced worldwide, most lenders are willing to be flexible on their policies with homeowners.
Forbearance does not have any impact on your credit score, negatively or positively. It is important that you do not ignore regular payments to avoid foreclosure. Foreclosure can still occur after your forbearance period ends after 120 days of zero payments.
Mortgage Forbearance vs. Loan Modifications
Mortgage forbearance and loan modifications are not the same. Forbearance offers temporary changes to the terms of your mortgage, while loan modifications provide a permanent solution to borrowers that cannot make their monthly payments.
Contact Texas Sell Now
Thanks to mortgage forbearance, you can get your finances back in line.
If forbearance isn’t an option for you and you need help fast, consider selling your Fort Worth or Dallas, Texas, home to Texas Sell Now. We want to buy your property as-is for cash! Don’t worry about cleaning or making expensive renovations or repairs. Contact us to sell your Fort Worth house and get your cash offer today.