Definition, advantages and disadvantages, how to ask


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  • Mortgage forbearance allows you to suspend or reduce your payments, usually for three to six months.
  • Interest still accrues and you catch up on missed payments after the forbearance period ends.
  • Speak to your loan officer as soon as possible if you are concerned about making your next mortgage payment.

If you are afraid to do your next mortgage paymenta forbearance agreement may be an option.

With your manager’s approval, mortgage forbearance allows you to temporarily suspend or reduce your monthly payments. Interest may accrue and you will end up repaying missed payments. But in the meantime, you remain the owner, avoid typingand get some much-needed time to get your finances back on track.

Here’s what you need to know if you’re considering mortgage forbearance.

What is mortgage forbearance?

Mortgage abstention is a temporary solution for homeowners having difficulty making their monthly payments. It lets you take a break (or pay a reduced amount) for a set period of time, usually three to six months.

“Mortgage forbearance can make sense if you’re going through a tough time and have a plan to get through it,” says Jay Zigmont, a CFP® professional and founder of childless wealth. “If you’re dealing with a medical emergency, are out of work, and plan to return to work in three months, a mortgage forbearance can give you some breathing room.”

Of course, it’s not free money. “While mortgage forbearance can provide temporary relief, it’s important to remember that missed payments will still need to be made at some point,” says Shaun Martin, owner and CEO of Watson buysa Denver-based real estate investment firm.

This means that abstaining may not be a good option for everyone. “If you can’t pay your mortgage, getting a forbearance just kicks things up in the street and doesn’t solve anything,” Zigmont says.

How mortgage forbearance works

Mortgage forbearance temporarily replaces your initial loan agreement. At the end of the forbearance period, you return to the original loan agreement – taking over your monthly payments and catch up on failures.

Forbearance is a temporary solution most often used when a borrower experiences a short-term financial setback and expects to bounce back once the difficulties pass. Common situations include:

  • Loss of employment or reduction of working hours
  • Health problems
  • Illness or death of a co-borrower
  • Separation or divorce
  • Natural disasters
  • Increase in expenses

You may qualify if you are in financial difficulty and your loan belongs to Fannie Mae or Freddie Mac, or if you have a FHA, VirginiaWhere USDA mortgage. You can still qualify for another type of loan, but your agent may have stricter requirements. For example, you may need to submit a legal statement, called an affidavit of hardship, providing evidence of your financial hardship.

Your loan officer will provide a mortgage forbearance agreement if you are eligible. It describes the terms of the forbearance period, including the following:

  • Abstention period: This is the length of time you pause your mortgage payments (or pay a reduced amount). The agreement specifies a start and end date, usually spanning three to six months.
  • Payment amount: This is how much you are paying on your mortgage during the forbearance period. Depending on your financial situation and the agreement, you could pay a reduced amount or nothing at all.
  • Repayment Terms : This details what happens when the forbearance period ends. Usually, you’ll resume your regular monthly payments and repay any missed payments plus accrued interest. Your servicer will help you figure out the best way to catch up, whether you make a lump sum payment at the end of the forbearance period or carry missed payments over to your loan balance.
  • Credit report: Does the repairer plan to report your forbearance agreement to the credit bureaus?

Mortgage forbearance generally does not incur additional fees, penalties or interest. But it can affect your credit.

“Most lenders will report forbearance to the credit bureaus, and that will lower your score,” Zigmont says. Nevertheless, reporting an agreed forbearance may have less of an impact on your credit than simply not making your payments.

Advantages and disadvantages of mortgage forbearance

Mortgage forbearance can provide a much-needed break in payments so you can avoid foreclosure while getting your finances in order. Still, it’s important to consider the pros and cons before deciding if forbearance is right for you.

How to apply for mortgage forbearance

The application process and qualification requirements for forbearance vary depending on factors such as your loan officer, mortgage type, and investor requirements for your loan. The first step is to let your repairman know what is going on.

“When requesting a forbearance, be sure to contact your lender and explain your financial situation,” says Jon Sanborn, co-founder of SD House Guys, a home buying company in San Diego, California. He adds that you need to be honest about why you’re having trouble making your mortgage payments and be able to provide proof of your financial hardship. It also helps if you have a plan to catch up on missed payments after the forbearance period ends.

Here is an overview of the basic steps to apply for mortgage forbearance:

  1. Contact your mortgage agent to request a forbearance. Your servicer is the company you submit your mortgage payments to each month.
  2. Explain your current situation. Give an overview of your financial situation and the difficulties you are facing. Explain whether you can make partial payments (and, if so, how many) and mention how many months of forbearance you want.
  3. Submit the documents requested by your repairer. Be prepared to provide details and documents regarding your mortgage(s), income, expenses, debts and any unemployment benefits you receive.
  4. Wait for a response. If your repairer approves the forbearance, you will receive an official document outlining the terms of the agreement. You can appeal the decision to your repairer if he refuses your request. In this case, another loan officer will review your application and provide an updated decision.
  5. Sign and return the abstention agreement. Review the agreement to make sure you understand the terms and what happens after the forbearance period ends.
  6. Continue with terms of agreement. Make any required partial payments and stay up to date on your property taxes, homeowners insurance, and homeowners association (HOA) dues.

Frequently Asked Questions

Mortgage forbearance is an agreement with your loan servicer that allows you to suspend or reduce your payments, usually for three to six months. To qualify, you must be experiencing short-term financial hardship that you expect to recover from soon. At the end of the forbearance period, you resume your regular monthly payments and repay any missed amounts.

Mortgage forbearance can hurt your credit score if your managing agent reports it to the credit bureaus. However, forbearance is an agreement between the lender and the borrower to modify the payments. This hurts your credit less than a foreclosure or a series of missed payments.

When mortgage forbearance ends, you return to the original loan agreement, resume your monthly payments, and catch up on those you missed. The forbearance agreement describes how it works – whether you pay a lump sum or add the missed payments to your loan balance. You may want to consider a loan modification if you cannot pay what you owe at the end of the forbearance period. This permanently changes the rate or terms of your mortgage, making your payments more manageable in the long run.


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