forebearance home mortgage loans

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Forbearance for Home Mortgage Loans

Forbearance for Home Mortgage Loans

With all the economic uncertainty going around right now, many people across the country are finding it hard to pay their bills. While canceling cable and ditching overpriced streaming services can help you save money, it’s not enough to make ends meet during this trying time. If you’re having trouble making payments on your mortgage, you’re not alone. That’s why many lenders are offering forbearance for home mortgage loans.

What Forbearance Is

Forbearance is a temporary pause or reduction of your regular monthly mortgage payments. Your eligibility is determined by your lender and the amount of the reduction or the duration of your paused payments depends on what they’re willing to provide and how severely impacted you are during the financial crisis.

It’s designed to be temporary and just because you’re pausing or reducing your monthly payments doesn’t mean the amount you owe on the loan will change. You’ll still need to repay the full amount of the loan off in the future.

Who Is Offering Forbearance?

Currently, borrowers of federally backed home mortgage loans are entitled to a short-term pause on payments. This means you won’t have to worry about your mortgage payments until the pause is over. Borrowers with loans from Freddie Mac, Fannie Mae, the VA, the USDA, and the FHA.

Private lenders and conventional banks are also offering forbearance and reduced payments, but it varies from lender to lender. You’ll need to call your loan provider to find out what they’re offering and how long it will last.

The CARES Act Details

In response to the Coronavirus pandemic, the government passed the CARES Act to help people with government-backed loans better manage their finances. If you’re financially impacted by the pandemic, the CARES Act entitles you to 180 days of forbearance with the option to request an extension for another 180 days. Unfortunately, it’s not granted automatically. You will need to speak with your lender to request forbearance.

While your payments are on pause, your loan will still accrue interest at its normal rate. Every payment that you skip will increase your total loan amount by the interest accrued that month. If you can, try to make your payments on time. This will help you stay on track to pay the loan off by its original end date.

If You Need Help, Reach Out

If you’re dealing with financial hardship related to the Coronavirus pandemic, don’t muddle through it on your own. Reach out and get the help you need managing payments on your home mortgage loans.