In case you are going through some financial crisis, a mortgage forbearance provides you temporary relief from making the repayment installments. The lender of the mortgage payment is approached and you can inform them the reasons as to why you will not be able to make your payments. You then receive an official statement from the lender that your forbearance has been granted. Make sure to follow the routine if you want to apply for forbearance as failing to do so might result in legal issues and also affect your credit score.
From the above-mentioned description, we move on towards what happens when your mortgage forbearance is ending. In some cases where your financial capability has improved, you will easily be able to go back on the tracks and resume paying your installments. However, in the worst-case scenario, there are chances that you still don’t have enough funds to pay your monthly mortgage. In such times, you can choose from some of the options available below.
Request For Extension
This can be your first option. You can request the lender to extend your forbearance for a few more months. You can take in proof of your financial situation to show that it has not improved during the period of the forbearance. While it isn’t always confirmed that the lender will agree to it, perhaps they will agree to look into the situation and offer alternative forms of help. In case you do get an extension, take note if the interest rate will be higher or if there are any extra fees that could be charged for this service. This will prepare you for the future installment amount when you can start repaying it again.
Check Refinance Options
You can switch your existing home mortgage loan for a new one with more favorable terms and can then refinance your mortgage. Refinancing can help you if you still prefer to stay in your home but are still for some reason unable to pay the installments. Refinancing is however not an option during the period of forbearance. Check your credit score on creditkarma.com and try to boost your credit score before the forbearance period ends as that will make it easier for you to qualify for refinancing. You can also try to improve your chances of getting a refinancing option by paying your monthly installments for a period of three months after the forbearance period ends.
Selling Your Property
A good opportunity to sell the property on the mortgage and clear all your debts, which is a prevalent practice in most parts of Colorado. The professionals behind this Aurora Realtor emphasize the need to sell your property at the best price possible. This can help you pay off your debts and even make some way for some extra funds. Your credit score will be intact and you can then start looking to invest in another property once your financial situation has started looking up again. This will be a quick way to relieve yourself from stressful situations wherein you struggle with finances for a long time.
The above tips can help you when the times for forbearance on a mortgage ends. It is better to start preparing before it happens so you are ready with the right resources when the time comes.