Congress’ mortgage relief program was created to temporarily suspend payments for homeowners facing financial hardship. Mortgage relief forbearance periods generally last between three and six months. However, some homeowners may need to defer their mortgage payments longer than the initial forbearance period.
When you request more mortgage assistance, it is known as a forbearance extension. This process is available for most home loans, and most allow you extend forbearance for up to 12 months.
This CARES act mortgage relief was designed to provide temporary assistance. Therefore, requesting an extension depends on your forbearance activity. However, due to the lasting effects of the pandemic, the federal government revisited these plans and options.
Not all borrowers will qualify for the maximum forbearance extension. Likewise, your loan servicer may only approve one extension, despite the federal guidelines listed above.
If you need more mortgage help and require more time to defer your payments, contact your loan servicer to explore all your options.
Mortgage forbearance is not mortgage forgiveness; the payments you defer during forbearance must still be repaid to your loan servicer. As your mortgage relief forbearance period ends, it is important to have a plan in place to ensure you are ready to make your payments.
Your loan servicer may offer various repayment plans to help you ease back into paying your mortgage. Not all loan servicers may offer the same types of repayment plans. Often, the options available to you depend on:
- Who backs your mortgage.
- Your loan servicer.
- Your personal situation.
Although mortgage forgiveness is not an option, you may be able to elect payment deferral. Instead of repaying your missed payments now, you defer them until you sell the house. Then, you pay the servicer all at once with the money you make during the sale.
Another option is loan modification, which essentially changes the terms of your home loan to accommodate the missed payments. The balance of your missed payments is added to your loan and the loan is extended (often by several months up to a few years). As such, your monthly mortgage payment will decrease to reflect the changes.
By Admin –