Don't Qualify for a Mortgage Modification?
Mortgage modification may help you obtain a more affordable mortgage payment by adjusting loan terms. While the option seems obvious, especially if you're struggling to make mortgage payments and facing possible foreclosure
, what happens if you are turned down for a modification? It's possible you may qualify for a special forbearance.
What is Forbearance?
Forbearance means to simply hold back and this option may be available through your lender. This means your lender has agreed to cease or hold back the foreclosure process and give you time to get caught up on mortgage payments.
Keep in mind, this option really isn't forgiveness on what is due but certain homeowners who may not qualify for mortgage modification are given this option. If you get forbearance there is a certain time period designated for you to get mortgage payments made. They could be reduced or suspended during this time but when time is up you will be expected to make regular payments as agreed in your mortgage terms.
You may even be required to pay extra to get the loan current. You lender may want you to make a lump sum payment by a specific date at the end of the forbearance period. Those more likely to be granted forbearance by their lender include homeowners experiencing changes in income, job loss, family emergency or illness.
Just like during the loan modification process, homeowners will need to demonstrate that they will be able to make payments. Forbearance may not be an option for some homeowners but it may depend on the type of loan and who your loan servicer is. If you have an adjustable-rate mortgage this option may vary. Contact your lender for details.