Some homeowners may find themselves in a financial crunch making it hard for them to complete their monthly mortgage repayment as expected. If you are a homeowner and you find yourself in such a situation, you risk foreclosure, and you may end up losing ownership of your home. However, foreclosure will only happen if you don’t make any effort to ask for a mortgage deferral. Several lenders offer viable solutions to homeowners who are experiencing financial difficulties to help them avoid foreclosure.
It is possible to defer your mortgage payment and settle it later on, but you need to seek your lender’s consent first. The most important thing that you need to keep in mind while trying to defer your mortgage payment is that not all lenders are willing to suspend your mortgage payment.
The term mortgage deferral is used to describe the temporary suspension of your mortgage repayments to provide short-term relief if you’re experiencing financial difficulties.
Forbearance and Forbearance Agreement
Typically, forbearance is granted before you start falling behind on your mortgage payments. You are expected to contact your lender proactively and discuss the possibility of forbearance if you are anticipating a period of financial hardship.
A forbearance agreement is a concrete agreement made between you and your mortgage lender in which the lending institution agrees to avoid initiating foreclosure on your mortgage while you agree to a repayment plan that will, over a specified period bring you to your current mortgage payment. This isn’t a long-term solution to your financial problems. It is specifically designed for homeowners who are experiencing temporary financial instability caused by unexpected circumstances such as health problems.
You will be expected to resume your monthly payments when the agreed forbearance period elapses. You should be ready to repay the unpaid loan portion using an agreed upon payment schedule. A forbearance is a good option for you if you’re experiencing temporal, financial problems. However, this might not be a good option for you if you aren’t sure if you aren’t sure of your financial future.
As mentioned earlier, mortgage deferment allows you to skip your monthly mortgage payment for a specified period. There may be several options regarding the unpaid loan amount and accrued interest. The interest may be added to the principal amount or sometimes waived to offer you relief.
A mortgage deferral can be granted along with another mortgage relief option. For instance, if the lender is modifying your loan to a new payment amount, he/she may allow you a short deferment period before the new amount goes into effect.
Always communicate with your lender even after you have been granted a mortgage deferment. Communication will build the trust between you and your lender since it is the only assurance that you are committed to paying your loan as agreed. The most important thing is for you to keep your home and avoid foreclosure.
You Must Provide Proof of Financial Hardship
You will also be required to provide proof of financial hardship when seeking mortgage deferral. Vital documents such as your income and bank statements can provide the necessary evidence that indeed you are facing financial difficulties. A mortgage deferral may be effected faster if you guarantee the lender that you will pay.
Each financial institution has its own set of policies that provide guidance when discussing mortgage deferral with a borrower. Sometimes, the lending institution may refuse to offer mortgage deferral for one reason or the other.
The most important factor which determines whether you deserve mortgage deferral or not is proof of financial hardship. Before you contact your lender, be ready to explain the nature of your financial difficulties to prove that it’s a temporary situation and you already have a long-term solution that you’re working on to regain financial stability as soon as possible.
Keep in mind that mortgage deferral is only a quick fix to temporary problems. If the lender thinks that your problems will be long-lasting, then he/she may advise you to explore alternative solutions such as a permanent loan modification
Typically, a newly established mortgage usually includes an automatic deferment of the first payment. For example, if you sign your mortgage agreement in October, you may not be required to make your first payment until December or January 1st, and there will be no consequences.
Negotiate Right Plan for You
Mortgage deferment may come in a wide variety of shapes and sizes, so it is upon you to negotiate for what fits you best depending on the nature of our financial hardship. For instance, the lender may choose to suspend your monthly payment for at least one month while other lenders may decide to reduce the payment amount to a figure that you can comfortably afford.
Other lenders may even opt to waive the late payment fee once you get your monthly payment back on track. It is good for you to evaluate the available relief options and inform your lender which one suit you best depending on your current financial situation. Negotiating the right plan offers you ample time as you try to figure out how to get back on track.
Late mortgage payment shouldn’t be an option for you. It’s always a bad idea. If you find yourself in a difficult financial situation and your lender won’t let you defer your payment, then it’s good to request an alternative payment arrangement. For instance, your lender should allow you make smaller payments for an agreed time.
Only God knows the future. With prayer I am hoping to defer my mortgage payment for a couple of months, putting the defer payments at ate end of the loan. Our credit is good and we have a little cash saved. I just pray to God that his grace will end this virus. I personally believe he God is doing something to bring attention to him, He is my hope and perhaps more people on earth will turn to him. I truly believe that if this world seeks God’s help, he will respond.
My bank wouldn’t give me a mortgage deferral and stated that they are only offering a forbearance for 90 days. Should I accept this offer? Because I’m unemployed at the moment and I don’t know when my job will be available for me to work!
Hi Sherlita, My loan company said the same thing. I am thinking a big hit in 4 months as opposed to maintaining somehow is not the way I want to go. If I don’t have the money now how will I have 3 months plus the 4th to pay all at once?
Please ask for a modification of your loan,just show them you really love your home by sending in a hardship letter of your circumstances & all needed paperwork to prove your situation,I did it with my last mortgage company who went bankrupt and transferred their accounts to a new lender,I just sent my paperwork off too the new lender for a modification because they only deferred the payments like yours for 3 months only,I got my first mortgage down from $1,412 a month to $738 dollars..I’m praying I’ll get it down now to $750 from &998 a month..bless you and good luck
Currently, my bank, Truist is only offering a forbearance for 90 days. I have to pay the full 3 months mortgage in 90 days. this isn’t good. I’m hoping Truist will offer a deferred 90 days (or more) payment option where the amount is moved to the end of the loan.
Bank of America stated that they would defer mortgage payments for 3months; but at the end of 3months I should contact them to discuss a ‘plan for re-payment’…Not exactly what I understood the President to say. What makes the bank think I could repay 3months of payments at once if I cannot pay one payment now.
I will probably be moving my Mortgage to another bank.
They offered me 3 extension and got a call yesterday saying there looking to ge all the unpaid months caught up in full
My Lender says that I cannot have a deferment because I have a VA loan but because I live in NC I should be able to use this. I was told state law allows be too defer. I have spoken to 10 different customer service agents in 10 days and all of them except 1 says I can not get. Can you help me?