Forbearance allows a homeowner to defer or reduce their mortgage payments for a certain period of time. It is a great solution for those looking for a short reprieve, with the intention of getting right back on track. However, filing for forbearance will only put off the inevitable for people dealing with larger financial issues. Here’s what you can expect if you can’t make your mortgage payments at the end of the forbearance period.
When the Forbearance Period Ends
In an ideal situation, the borrower will complete the forbearance period, and be in a better place financially. They will jump right back into their payments as if nothing had changed. However, this isn’t always the case. Homeowners who have lost a job, lost a loved one, or who are dealing with a complex illness may not be able to get their finances in order before the forbearance period ends. People in these situations may find themselves in over their heads by claiming forbearance than if they had just sold the property from the beginning.
Requesting an Extension
Many lenders will work with you to extend the terms of your forbearance period. Extensions can last up to 6 months and vary based on your loan type and when you first filed for forbearance. Keep in mind that the lenders want to work with you. They don’t want you to default on your loan. If you are confident you will be able to get back on your feet after a forbearance extension, talk to your bank to find out what they can do for you.
Loan Modification
Loan modification is an option many lenders offer to help borrowers get caught up on their loans. The modification can affect the interest rate, the loan terms, and the monthly payment. Loan modification is a popular choice to help people reduce their monthly payments, while maintaining their credit and adding to their savings accounts.
Can I Sell My House During the Forbearance Period?
Absolutely! At the end of the day, the bank is just looking to recoup its costs. If you are able to sell the house and pay off your loan, they will not stand in your way. One thing to note is that you will need to factor in any payments you have delayed, making sure to repay your lender upon the sale of your home.
Listing Your House
Some homeowners will try to list their property during the forbearance period. If the house is in great shape, this method can help them to sell the house and avoid foreclosure. That said, typically, properties in forbearance will require a little bit of work. If you are struggling to make your mortgage payment, it isn’t likely that you will be able to keep up with the maintenance and repairs either.
Selling Your House Directly
A direct sale to a buyer such as Lone Star Home Buyers of Texas will allow you to sell your house as-is, without having to clean up, make repairs, or wait around for the right buyer to come along. Our team will buy your house no matter what condition it’s in, closing in only a matter of days.