I spoke with San Diego 10News about some of the pros and cons of forbearance for borrowers. Like I’ve mentioned before if you are considering this option reach out to your loan provider first. I’m happy to answer any questions you may have and help you determine if this is the right option for you. If you can continue to make your regular mortgage payment, this is typically the best course of action for you.
A forbearance will put a pause on your mortgage payment, but that amount will still be due. Depending on your loan provider you may have the option to repay it at the end of your loan as a lump sum or have an extension added to your loan. You may also be able to add that amount into your monthly payments. This may provide some financial relief for borrowers who find themselves unable to make their mortgage payment, and the payback options should be discuss to fit your needs.
Once a borrower has elected forbearance on their loan, they should be aware that they may not be able to refinance on that loan for possibly 12 months after they are current with payments. Recently rates have been low and many borrowers have taken advantage of this to refinance and achieve a lower monthly payment. This option may not be available to those who refinance so be aware of this for future plans.
In market news, the rising number of forbearances have caused a shortage of cash flow. This will drive up the price of mortgages so future borrowers may find it harder to get a home loan.
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