What Happens If I Can't Pay My Mortgage Because of the Coronavirus?
The Coronavirus has temporarily altered our lives and for many the uncertainty brings about more panic and worry. And one of those worries might include the ability to make your mortgage payments. The very first thing I would advise.....call your lender immediately.
It is the not knowing and fear that sometimes makes things worse. Taking action is the very best thing to do to at least reduce the anxiety. One of the options to discuss with your lender is Forbearance and if this is not the solution for your situation. Ask about other relief programs.
What Will a Forbearance Do For Me
Forbearance is either a temporary suspension or reduction of your mortgage payments for a specific period of time. This is an option if you are either behind on your mortgage payments or on the verge of missing payments due to the fact you are experiencing a temporary hardship.
How Does Forbearance Work
If you qualify for a Forbearance you and your mortgage company will define the plan which includes the length of time of the forbearance period, what is the reduced payment amount, or if suspended no payment and the terms of the repayment.
Do I Have to Repay Those Missed Payments?
Yes, you do have to repay the amount that was reduced or suspended. There are a couple of options for doing this.
- A repayment plan whereby you can either make a one-time payment to bring the mortgage up to date, or by adding a specific amount each month to your payments until all is paid back.
- Another repayment option is a loan modification. With this option your mortgage company can change the terms of the original loan which will reduce your monthly payments to an amount that is more affordable.
The type of repayment plan will depend on your financial situation at the end of the forbearance period.
By initiating a Forbearance you will be able to stay in your home and avoid foreclosure until you get back on your feet.