I Am in Forbearance! What Can I Do?

Just about everyone experiences financial setbacks at times. These setbacks can be a real challenge, but you can rest assured that there is always hope. If you are struggling to make your mortgage payments, you might be in what is called “forbearance” with your bank. This means that you have a bit of extra time to get your finances in order. However, you are expected to resume normal monthly payments once the short forbearance period is over. If you need a long-term fix, here are three options to consider. 

In some cases, refinancing your home can equal big savings for you. If you have a high-interest rate on your loan, and interest rates have fallen significantly, it might make sense to refinance. Another way you can save money by refinancing is to extend the length of your loan. If you are on a 15-year loan, you can significantly decrease your monthly payments by changing it to a 30-year loan. Just remember, you will typically pay some significant closing costs when you refinance. 

When you refinance your home, your mortgage is paid off and you are given a whole new loan. With a loan modification, you keep the same loan, but with certain approved modifications. Common loan modifications are similar to those in a refinance, such as extended terms, lowered interest rates, and changing from an adjustable interest loan to a fixed-rate loan. The downside of a loan modification is that it can negatively affect your credit score. 

If your temporary setbacks appear to be turning into long-term setbacks, you might be in the sticky situation of living in a home that you simply can’t afford. It can be a hard reality to face, but in the end, you will be much better off selling your home as quickly as possible and starting over with something more affordable. By selling to a home buying company, you can get out of your loan within a matter of weeks or even days. 

Above all, you want to avoid foreclosure. Foreclosure can cut over 100 points from your credit score in one fell swoop, and it remains on your credit report for seven years. This will make it difficult to get a future loan, and will significantly increase your interest rate even if you do get one. 

Are you behind on your mortgage payments and don’t know where to turn? BUYBHM is here to help! Simply click here and get a free, no-obligation cash offer within 24 hours. With BUYBHM, there really is a light at the end of the tunnel!