A looming foreclosure could make you fear that you have no way to save your home. The truth is that many banks offer options to help their clients get back on track with their mortgages. One of these options is a mortgage deferment.
To understand how a mortgage deferment works, you should first know about mortgage forbearance.
Using mortgage forbearance to halt foreclosure
The Motley Fool explains that it is possible to come to an agreement with your lender to pause your mortgage payments for a period so that you can financially recover. Mortgage forbearance may also suspend your late charges. Once the forbearance expires, you will resume your mortgage payments and pay your delinquent amounts.
Using mortgage deferment to set payment terms
Requesting a mortgage deferment means you are asking to delay paying your missed mortgage payments until much later. You have different options to establish when you will pay your back amounts. You may make the payments at the end of your mortgage period, or following the refinancing of your mortgage, or even when you sell your residence.
The positives of mortgage deferment
Using mortgage deferment in conjunction with your mortgage forbearance means you could wait a long time until you have to pay your back payments. This may help you rebuild your financial resources. Deferment also lets you take advantage of mortgage refinancing to help you pay what you owe.
Still, putting off your missed mortgage payments for a long time will keep you in debt for that much longer. Think about what options will best help you avoid foreclosure and restore your financial health.