Mortgage Forbearance Is Ending - What Now?

Have you planned for the end of forbearance? Many people who haven’t been paying their mortgages during COVID because of forbearance might face foreclosure in 2022. What started as a lifeline during one of the most challenging times of our generation could end in catastrophe for some homeowners.

But you have options! Paying back a lump sum, establishing a new payment plan, modifying payments, or restructuring your mortgage are just a few things you can do once forbearance ends. So let’s talk about forbearance and what your options are once it ends.

Talk to Your Lender

Being upfront and honest about your financial situation with your lender can go a long way. What will happen at the end of forbearance will be different from lender to lender and they will most likely look at it on a case by case basis.

So talking to your lender gives you options and allows them to work with you to find the best solution for your needs. Dodging your lender is a sure way to foreclosure.

Request an Extension

If you’re still in the period of your forbearance, you may qualify for an extension. But keep in mind that you won’t automatically get one unless you request it.

Borrowers that requested forbearance right when the CARES Act kicked in won’t qualify, but if you’re a borrower who is waiting to take advantage, you could qualify. Try reaching out to your lender to see if you can apply for an extension.

You Can’t Afford To Stay in Your Home

If you just can’t afford to stay in your home, you have options. Fortunately, the real estate market is stronger than ever so you could come out with a profit instead of a loss if you decide to sell.

If your mortgage is worth more than your home, you can talk to your mortgage company about a short sale. A short sale is when you sell your home and even though money from the sale isn’t enough to pay off your mortgage, the difference is essentially forgiven.

The Bottom Line

If you’re nearing the end of forbearance, don’t panic, and don’t stick your head in the sand. Have a conversation with your lender and your favorite real estate agent to see what options are available to you.