When people realize they cannot pay their mortgage, they may feel like they do not have options. In some situations, mortgage forbearance may be the solution people need.
Mortgage forbearance is one option available to people who are experiencing financial difficulties. According to the Consumer Financial Protection Bureau, people can either pause their mortgage payments or pay a reduced amount. This may provide some relief as people rebuild their financial stability. However, this step does not change the amount that people owe. They usually still need to pay their mortgage in full and will need to make up these reduced or skipped payments later on.
What to know about mortgage forbearance
This solution is usually tied to each person’s unique situation. A forbearance option depends on the kind of loan people have, as well as the lender. Additionally, some mortgages may have requirements. Lenders take these into consideration while creating the terms of forbearance.
How to get a forbearance
According to Nerd Wallet, people usually need to fill out an application for mortgage forbearance. They will likely need to include information about their current income and expenses, as well as provide a copy of their mortgage statement. Additionally, people typically need to explain why they need forbearance. It may be helpful for people to include documents that demonstrate their financial setbacks, such as credit card statements. Many people may not feel comfortable laying out the fine details of their financial difficulties. However, all this paperwork can help lenders determine if forbearance is a good solution.
How long forbearance is in place
Lenders do not design mortgage forbearance to be a long-term solution. People may make no payments or reduced ones for up to one year. If people are still experiencing financial difficulties, they should speak to their lender again to see if they need a different solution.