Make Sure You Do Not Make This Mistake When Delaying Your Mortgage Payment

May 4, 2020

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So far, 3.5 million mortgage borrowers have requested forbearance, representing nearly 7% of all mortgages nationwide. And that number is expected to increase again this month. Of course, forbearance is not a forgiveness and the number one thing to remember when discussing a postponement of payments with your mortgage lender is that you do not agree to a repayment plan you cannot afford. While original terms of forbearances called for a balloon payment at the end, many lenders, including Fannie Mae and Freddie Mac, now say that you don’t have to make a balloon payment the end of their forbearance period. Requesting a payment deferral modification will allow you move the balance you do not pay during the forbearance period to the end of the mortgage. So if you receive forbearance for six-months on a 30-year mortgage would now be debt-free after 30.5 years. You can opt for a repayment plan where they would gradually pay off the money they owe in addition to their monthly mortgage payments. With this option, the duration of the loan would not be extended, but monthly payments would increase. In most cases, the lender/servicer will try to contact homeowners 30 days before the forbearance plan is scheduled to end to determine which repayment option works best for them at that time. You can also proactively request this information from their servicer.

SOURCE: Market Watch

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