13.2% of borrowers with no mortgage left without a plan
Many Americans have lost their jobs or suffered loss of income as a result of the coronavirus pandemic. The good news is that there has been relief for homeowners in the form of mortgage forbearance.
With forbearance, you can put your monthly mortgage payments on hold for a period of time and then catch up later. As part of borrower protections during the pandemic, homeowners can request an initial 180-day forbearance period, followed by a 180-day extension for a total of 360 days.
If you put your mortgage on hold early on in the pandemic, you may soon have to start paying off your mortgage again. But do you know what to expect after your inactive period is over? Many borrowers don’t. In fact, 13.2% of homeowners with forborne mortgages walked out without a plan in place, reports the Mortgage Bankers Association.
If you are unsure of what to do about your mortgage after forbearance, be sure to contact your lender as soon as possible. Otherwise, you might be in a stressful world.
How are you going to fix your missed mortgage payments?
One thing mortgage lenders can’t do during the pandemic is force borrowers with delinquent home loans to make up for their missed payments into an immediate lump sum. As such, you don’t have to worry about having to pay around a year of payments immediately after the forbearance ends. But you will need to make up for those missed payments on time, and if you’re not sure what that means or how it will work, contact your lender as soon as possible. This way your lender can explain your options to you so that you know what is expected of you.
Keep in mind that if your financial situation has not improved since you applied for forbearance, you may have some options to keep your home, even if you cannot postpone your next mortgage payments or catch up on those you owe. you missed it so quickly. Your lender, for example, might agree to let you change the terms of your mortgage, which might lower your monthly payments to a number you can afford. Or, your lender may allow you to refinance your mortgage into a loan with a lower interest rate. This too could drastically reduce your monthly payments, especially since today’s refinance rates are near their all-time low.
The point, anyway, is that you’re not necessarily unlucky if your forbearance period comes to an end and you can’t keep up with your mortgage payments. But being in the dark won’t do you any good. So, if your forbearance period is coming to an end, call your lender and find out what to expect. And if your finances are still in the trash, say so clearly. Your lender may be willing to give you more leeway and help you stay in your home, but if you don’t ask for that help, you won’t get it.