Forbearance (What you should know)

Coronavirus has caused economic uncertainty that leaves many vulnerable. Because of this, some homeowners are asking for mortgage forbearance under the CARES Act. If you’re considering asking for mortgage forbearance, here are a few things we think you should know so that you make an informed decision.

• Each individual Mortgage Servicing Company may have adapted the act differently, so you need to speak directly with your Servicer to know your options. 

• Monthly payments resume when the forbearance period ends. On top of your monthly payment, you’ll also owe the total amount of money for the months you didn’t pay during forbearance.

• It’s unclear how this will be reported to the credit report and impact your ability to obtain a new mortgage or other new loans in the future . 

• You can’t refinance or get a new mortgage if you’re in forbearance. You’ll only be able to do so when you’re caught up on your payments.

Bottom line: Asking for forbearance is something you need to be careful about. Weigh the pros and cons and talk to your Servicer to see if it makes sense for you.

Feel free to contact us if you have any questions.