More homeowners are in search of mortgage relief due to the COVID-19 pandemic, and options like mortgage deferment and mortgage forbearance are becoming readily available to those in need.
Mortgage deferment and mortgage forbearance allow borrowers to temporarily stop making their monthly payments, but they differ in what happens afterwards. At the end of a forbearance period, the amount of payments missed are due in a lump sum, however, lenders may choose to work with borrowers to structure a payment plan.
On the other hand, deferment is allowing borrowers to repay the money over time or add it to the end of their loan period.
Technically, a mortgage forbearance agreement is when you’ve possibly been late, and the lender agrees not to foreclosure during that forbearance period.
More homeowners are in search of mortgage relief due to the COVID-19 pandemic. Don’t just assume you can skip a payment. Call your lender now, let them know, and make arrangements.
Forbearance and deferment aren’t the only options. Some lenders are doing loan modifications, too. Additionally, these options may still affect your credit scores, so be sure to ask questions and that it’s right for you and your family.
The bottom line is that lenders want to remind consumers: Nothing is free. It does not necessarily pause the interest that is accruing, and it does mean that you’re going to have to make that principal and interest payment at a later date.