Here’s some great advice for homeowners who are in mortgage forbearance.
This past year was a rough one for all of us, but now hopefully we’re seeing the light at the end of the tunnel. Today I wanted to talk a little bit about mortgage forbearance, or the delayed mortgage payments that were offered to homeowners back in March when COVID-19 hit and the CARES Act was passed.
It’s unclear whether lenders will require a lump sum payment at the end of forbearance or whether that amount will be added to the loan balance. It seems that it will be added to the loan balance in most cases
If you’re in a situation where you do have to pay that lump sum, you need to be making plans to either pay it off or sell your home before it’s due.
If your balance is going to be added to the back end of your loan, then you’re probably going to be OK if you can start making those payments again. As long as you have a plan to make those payments, you’re in good shape. If you don’t, you need to explore your selling options to at least keep the equity that you already have in your home.
To give you an example, let’s say your mortgage payment is $1,000 per month. Each month, that $1,000 is getting added to your loan, and by the end, you’ve added well over $12,000 for the year. The longer you stay in forbearance the longer your balance will keep rising.
If you have any questions for me about your situation or real estate in general, don’t hesitate to reach out via phone or email. I’d love to help you, your friends, coworkers, and family.