Loan Forbearance and the Next Steps
/Dan Hubrich of Mountain View Mortgage is back and this month he’s talking about what is next for those of us who took advantage of loan forbearance.
This month I’d like to do a follow up on mortgage forbearance. A lot of home owners have taken advantage of part of the Cares Act which allows people to place their mortgage into forbearance for some payment relief during Covid-19. However, just like the popular saying goes “There’s no such thing as a free lunch”….you need to know that this also applies to the forbearance programs. The biggest thing to remember is that forbearance is NOT the same as deferment. A loan deferment will put your skipped payments onto the back of the loan and it just gets added to your payoff. The only thing a forbearance does is that it won’t penalize your credit for missing payments but those payments keep getting stacked up and will need to be paid back sometime in the near future. Several people have come to me for a refinance who were in forbearance only to find out that they had to make up the back payments prior to refinancing. There is some good news for home sellers though. If you sell your home to buy a new one then those payments would not need to be paid back and it would just get added to your payoff. Call me anytime for more information if you have questions about any of this. Thanks!