How long does mortgage forbearance last?

In rare situations, there could be a scenario in which your forbearance lasts for a longer timeframe. In the vast majority of cases however, it’s going to last anywhere between a month and a year. You’ll have to check in with your servicer every month during forbearance. Rocket Mortgage forbearances are typically approved in 3-month increments.

What is the difference between mortgage forbearance and deferment?

Forbearance refers to the ability to pause or lower your mortgage payment for a period of time during a financial hardship. Deferment is a potential option for dealing with repayment once the forbearance is complete. Deferment involves putting part or all of the money you owe in past-due payments at the back end of your loan to be paid when you pay off the mortgage.

How does mortgage forbearance affect my credit?

In most instances in which you seek forbearance, servicers or lenders will report your forbearance which would negatively impact your credit score. The exception to this tends to be natural disaster forbearances. There’s also no credit impact for those in an ongoing COVID-19 forbearance. It’s worth noting that post-forbearance options like modifications can lower your score and put delays on when you can get your next mortgage. Speak to your servicer and a financial advisor.

Can I refinance while in forbearance?

As noted above, you may be able to pay off the payments missed in a forbearance if you have enough existing equity. Regardless of the reasoning for your refinance, be aware that a lender is going to look at your mortgage payment history. Depending on the circumstances leading to the forbearance, this could cause you to have to wait to get a new mortgage in many cases.

Does interest accrue during mortgage forbearance?

Every mortgage payment you make includes principal and interest (as well as taxes and insurance, if you have an escrow account). If you’re in a forbearance, the amount you pay back will also include any interest that would have been due had you made the payments on time. There are no extra interest charges due to being in forbearance. It’s worth noting that if you get a modification and the interest rate is higher than the rate on your current mortgage, you could end up paying more interest.

What Is Mortgage Forbearance?