If you’re struggling to make your mortgage payments, you may have heard of “mortgage forbearance.” But what is it, and how does it work?

We’ll examine its benefits and risks and when you should consider using it. Read on!

Are you feeling the financial pressure caused by Covid-19? Mortgage forbearance can provide much-needed relief.

This agreement temporarily pauses your loan payments, usually three to six months, for a predetermined time.

So, it is an important tool if you’ve lost your job or are dealing with illness due to Coronavirus impacts.

Your lender will work out any details about this arrangement to best suit both parties – but keep in mind that repayment is required at the end of the forbearance period.

It’s important to note that while your payments are suspended, interest will continue to accrue on your loan.

If you’re struggling to make ends meet, mortgage forbearance can be a helpful way to stay in your home while you get back on your feet.

However, it’s important to remember that this is a temporary solution—not a way to avoid making payments indefinitely.

You should only consider using forbearance if you’re confident you can make up the missed payments once the forbearance period is over.

However, if you’re unsure whether it is right for you, we encourage you to speak with your lender about your options.

They can help you decide whether or not forbearance is right for your situation.

Forbearance itself will not impact your credit score.

However, missing any payments during the forbearance period will show up on your credit report and could lower your score.

So, ensure your payments are on time to avoid credit score problems.

You’ll need to resume making regular mortgage payments at the end of the forbearance period.

If you’re still facing financial hardship, you may be able to modify your loan.

You can also refinance your loan to get a lower interest rate or extend the term to have more time to pay it off.

To request forbearance, you must reach out to your servicer and ask for it. Here’s what you need to know about how to request a mortgage forbearance.

The first step in the process is reaching out to your mortgage servicer. You can contact them by phone using the number on your contract. That’s the safest way.

Provide information about your current financial situation so they can understand why you request a forbearance.

The next step is asking for forbearance specifically.

Be sure that the representative you are talking with understands that this is what you seek.

Forbearance on your mortgage payment, not a loan modification or any other assistance.

Then they can provide the correct information and guidance regarding the process.

You may have questions about the process of requesting it, so be prepared with these questions before contacting your servicer.

Common questions include:

It’s important to get all of this information before proceeding further in the process.

This way, you clearly understand what is required from both parties when requesting a forbearance on your payments.

There are many possible reasons why your mortgage forbearance application may be denied.

The most common reason is that you do not meet the lender’s “financial hardship” or “hardship status” criteria to qualify for forbearance.

The lender does not believe you have a reasonable chance of getting back on track with your mortgage payments within a reasonable time frame.

Other reasons could include a lack of documentation or incomplete information provided on the application.

If your mortgage forbearance application is denied, don’t give up; options are still available.

First, review the denial letter carefully and ensure you understand why it was denied so you can address those issues in future applications.

It may also be worth contacting an experienced real estate lawyer who can review the situation and advise you on how best to get approved.

Another option is to look into other types of loan modifications, such as:

After reading this post, you know that mortgage forbearance allows homeowners to stay home during financial hardships.

So, if you ever struggle to make payments, you have options.

Do you want to learn more about mortgages? Stay with us, and don’t miss our post below!