If your income’s been affected because of the COVID-19 pandemic, you may qualify for forbearance. This is an arrangement with your mortgage servicer that allows you to skip payments, or make smaller payments until you’re back on your feet financially.
Will my loan qualify?
The recent Coronavirus Aid, Relief, and Economic Security (CARES) Act includes forbearance for homeowners who are experiencing financial hardships due to COVID-19. Your options depend on the type of mortgage you have.
If you have an FHA, VA, USDA or conforming loan
, you have a federally-backed mortgage. The CARES Act enables you to suspend payments for up to 12 months.
If your loan is not federally-backed
, you’ll need to consult your loan servicer to find out what forbearance options are available to you. Your state may also offer assistance.
Remember … forbearance is not forgiveness
No matter what forbearance plan is offered, you’ll still owe the same amount as before. Forbearance won’t erase what you owe. If you’re able to keep up with your payments, keep making them.
How to apply for forbearance
If you need assistance, contact your mortgage servicer right now. Since other borrowers are requesting assistance, wait times for responses may be longer than usual.
When you’re discussing options with your servicer, be sure to find out exactly what happens when your forbearance period ends
. For example, your skipped payments may be added to your loan term or converted to a lump-sum balloon payment. Or the total of your missed payments may be divided up and added to a number of future payments.
Together, we can win this battle
Although the coronavirus pandemic has taken all of us into uncharted waters, we are still here to offer guidance. Contact Stearns or your loan officer if you have additional questions.
For more information on your options, visit these resources provided by the Consumer Financial Protection Bureau (CFPB)
Apr 10, 2020