Anchor yourself in LOVE – Rachel Stafford
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Before we get into some options that your mortgage company has to offer, I wanted to take a minute and let you know that the picture above is my oldest son Owen, with our bearded dragon named Charlie.
Charlie is so docile and sweet. I never thought I would say that about a reptile!
How A Forbearance Works
Now about forbearance plans that the mortgage company might have to offer you. You need to have a hardship for this plan.
Examples would be a loss of a job, pay cut, medical bills, huge expenses for the house, etc… Forbearance plans will allow you to make zero or partial payments on your mortgage for usually 3 months at a time.
The months and payments can vary by whoever is your investor. To learn what the difference is between a servicer and an investor click here.
Throughout the rest of this post, I will be using the word servicer referring to the mortgage company.
What happens if you are on this plan making half payment? The servicer will apply for a full mortgage payment when they have one.
For example, lets say that your mortgage payment is $800 a month usually. On the forbearance plan, you will be making $400 a month payments for three months.
After you make your second payment on this plan the servicer will finally have a full payment to apply to your mortgage loan.
You are probably thinking well then, what do they do with my first payment that I made?
Good question!
Your first payment will sit in your account but in a holding spot in your account.
If you are thinking at this point will it hurt my credit? Absolutely it will. This plan will keep affecting your credit until you become current on your mortgage loan.
Every 30 days the servicer reports to the credit bureaus. If you don’t want the late payment to report to the bureaus this plan might not be for you.
What Happens After The Plan
After the three months is up, you will be re-evaluated to determine what the next step is, to get your mortgage back on track.
If your circumstances have still stayed the same, then the forbearance plan might be able to be extended for another few months.
On the other hand, if your hardship has been resolved, then that is where the servicer will review your loan for other options to bring your mortgage current.
The quote above came from a book that I just finished reading called ONLY LOVE TODAY. Great book on how to slow down the heavy pace of life and look at what you have around you. Choose LOVE over anything else!
Stay tuned for my upcoming book called Big Banks Small Thinking! My E-book is now available here!
Has this post helped you in any way? I’d love to hear!