Forbearance deep dive? Forbearance is a temporary pause or reduction of mortgage payments during financial hardship. It typically lasts 3 to 12 months. Forbearance is an emergency measure, not a long-term solution, and the missed payments must eventually be repaid.
How Forbearance Works
When you enter forbearance, your lender agrees to reduce or suspend your mortgage payments for a set period. Interest continues to accrue during forbearance. At the end of the forbearance period, you must repay the missed amounts through one of several options: a repayment plan, loan modification, deferral, or lump sum payment.
Forbearance does not forgive the missed payments. It simply postpones them. You will need a plan to repay what was missed before entering forbearance.
How To Request Forbearance
Contact your loan servicer directly to request forbearance. You will need to explain your hardship and how long you expect it to last. The servicer may ask for documentation of the hardship. Federal regulations protect borrowers who request forbearance due to qualifying hardships such as natural disasters, medical emergencies, or job loss.
Alternatives to Forbearance
Before choosing forbearance, ask about other options. A loan modification may provide a permanent solution. A repayment plan spreads missed payments over time. A deferral postpones missed payments to the end of the loan. Patrick Kevin Fagan recommends discussing all options with your servicer before committing to any path.
