Forbearance is a way for homeowners to “push pause” on their mortgage without worrying about late fees or the threat of foreclosure. It is a tool used by many lenders and borrowers to keep people in their homes without a financial loss on either side. Banks will benefit by avoiding the foreclosure or short sale process, while borrowers will have a way to side-step their mortgage payments until they have a better financial standing. It is a way to get back on track with your mortgage, without having to worry about the bills piling up or fees being tacked onto your balance every day.
The Length of the Forbearance Period
In most cases, an initial forbearance plan will last 3-6 months. However, if you are dealing with a tremendous financial hardship, you can file an extension that can last up to 18 months. Of course, this doesn’t mean your mortgage will magically go away. It just means that your lender is allowing you the time to get your finances in order. After the forbearance period is over, your mortgage will once again be due just like usual.
Getting Back on Track With Your Payments
During the forbearance period, homeowners should create a plan to get back on track with their mortgage payments. It’s important to critically run the numbers so you can determine if it makes sense to continue holding onto the property. You don’t want to request forbearance, put everything on hold, only to find you cannot repay your loan after all. You don’t want to go through this whole process only to find you are still struggling and would have been better off selling your house directly from day one. Trust the math and use the numbers to determine if you should stay or sell your Texas house.
What if You Can’t Pay Your Mortgage After Forbearance?
Sadly, many homeowners find that they still have difficulties coming up with their monthly payments even after pausing on their mortgage. Luckily, there are many options available to help alleviate the financial strain. For example, you can…
- List your house with a Austin agent who will help you to get the best price possible for your unwanted house. However, this method of selling can require repairs and upgrades and isn’t ideal when your property needs work, and you’re hoping to sell fast.
- Sell your house as-is to a professional buyer such as Lone Star Home Buyers of Texas. Our process is fast, fair, and will help you end the struggle with your burdensome property. In addition, you will not have to make repairs or pay for agent commissions.
- Request a loan modification from your lender. A loan modification can lower your monthly payment, but may increase what you owe over all.
Forbearance can be a short-term solution for financial distress, but it won’t help you solve any ongoing financial problems. Before you enter into a forbearance agreement, make sure that you wouldn’t be better off selling the property and walking away: reach out to us today to learn more about what we can do for you!