Is Forbearance Your Best Option for Your Jacksonville, Florida House or Property?
Forbearance: Is It Really Your Best Option?
You may have heard about mortgage forbearance as an option if you’re under financial stress and hardship. If you recently lost your job, are going through a divorce, or want to avoid foreclosure, this may seem like an option you’d want to explore. Mortgage forbearance gives you a break in mortgage payments by either completely stopping them for a while, or lowering your payment amounts for the forbearance period.
If you would like to learn if you qualify for forbearance, how it could affect you, and if it’s the right path to solve your current financial problems, keep reading.
Do You Qualify For Mortgage Forbearance?
If you’d like to know if you qualify for forbearance, there are a few things to keep in mind. Mortgage forbearance varies by lender; the first step is to determine if you’re qualified through applications. Still, you’ll be more prepared and have more peace of mind if you contact them and inquire about it first.
Some of the staple questions and documents your mortgage lender will ask of you include:
- your most recent mortgage statement
- an estimate of monthly income and expenses
- an explanation of your current financial situation with the support documentation.
It would be best if you started the process before missing any payments as it can affect your credit score.
What Happens Your Request Is Denied?
If your application or request for mortgage forbearance is denied, you can appeal the decision with your mortgage lender. A new loan officer will then review your application, and they’ll determine the new decision regarding your request. Remember to outline your financial hardship carefully, mortgage lenders must understand the reasons why you’re requesting forbearance to provide you with the right solution.
How Will It Affect You?
Mortgage forbearance should not be taken lightly and should be resorted to as the last option. It can help you if you have a short-term financial setback, but it can significantly affect you in the future. If you do qualify for forbearance, here are some consequences that could result from the situation.
Future borrowing
Although forbearance might not affect your credit score as negatively as a late mortgage payment, it can affect your future borrowing. Your situation will be considered a financial hardship, which could mean that you’ll have to wait at least one year until you could apply to a new mortgage. At times, you could wait longer until you reestablish yourself as a credible borrower.
Accrued Payments
Once the forbearance period ends, you will have to pay everything that was “put on hold” back to your mortgage lender. This can really increase due to not only the payments accumulating but interests accruing as well.
Higher Mortgage Payments
Depending on your mortgage lender, you will have options to repay everything you owe. There are many repayment options. Sometimes, lenders will require you to increase your mortgage payments to pay off what is owed from the forbearance period. Others allow you to pay everything at once. Either way, it can sum up to a significant amount.
Won’t Help if You Have Greater Financial Troubles
If you are having trouble paying your mortgage in general, mortgage forbearance will not help you and might not be the option for you. As previously mentioned, this is only a temporary solution that can pose a more significant financial burden in the future. If you know that your financial hardships require a more permanent solution, there could be other paths.
Is It Right For You?
So, is mortgage forbearance right for you? You must understand that this decision should be one that can benefit you in the long run before you make any agreements that could negatively affect you. If you see that this might not be the option for you, there are other options available that will take your mortgage off your shoulders and prevent foreclosure.
Many home buying companies make fair cash offers, which will alleviate your financial hardship by giving you cash at hand. Of course, you won’t have to worry about any repayments, interests, or a higher mortgage.
Henry Buys Homes Is The Option For You
Henry Buys Homes can put cash in your hands fast, and you won’t have to worry about foreclosure any longer. We buy houses in Jacksonville and cover all closing costs. With us, you won’t need to spend a penny during the entire transaction. It’s simple, and we can make it happen fast. Feel free to contact us with any questions, and we will be happy to help.