What happens when your forbearance period ends? Whether you are just considering doing forbearance or you are at the end of your mortgage forbearance period, you NEED to KNOW your options! In this video, I discuss what you should do if you are about to reach the end of your initial forbearance term or if you are considering doing forbearance and wondering what you should consider before going down that road.
New videos 3-5 times per week on Real Estate, Mortgage, Home Buyer Tips and Home Seller Tips – Subscribe for More Real Estate Tips and Real Estate Information – https://goo.gl/NZB1S6
What happens when your mortgage forbearance term is over?
As you approach the end of your forbearance term, your lender will likely reach out to you within 30 days from the term ending but if they do not, it’s up to you to contact them to discuss your options.
If you reach the end of your forbearance plan and either choose not to accept another forbearance term or no other options are given to you then you will need to consider how you plan to repay your missed payments.
At the end of your forbearance period, all payments not made during the forbearance period will have to be paid back. We realize this will probably be a big financial burden, which is why you’ll have a few options for how to handle it:
Pay it as a lump sum — If possible, the simplest option is to pay back the full amount owed at one time.
If you do not have the ability to pay the full amount owed at the time of reinstatement, you will need to work with your loan servicer to establish a repayment plan.
Start a repayment plan — Over a set number of months, an extra amount will be added to your regular mortgage payment to cover the amount you owe from the forbearance.
If you aren’t able to agree to the terms of the repayment plan, you can apply for a loan modification. A loan modification is often the last resort but eases the financial burden by folding the delinquent payments owed into the loan amount.
Loan modification — If you are unable to pay a lump sum or enter into a repayment plan, we will work with you on a loan modification. This may include an extension at the end of your loan giving you additional months to pay the forbearance amount.
What should I do if I’m just considering forbearance process?
Please don’t stop making your mortgage payments until you have been accepted and approved for a forbearance plan. Doing so will affect your credit in a negative way. Mortgage Forbearance is not payment forgiveness as it’s required to be paid back at some point in the future.
If you are considering forbearance or coming to the end of your forbearance period and have additional questions, please comment below or contact me directly.
Thank you for watching.
Connect with me: