Forbearance mortgage options are available for mortgages during this strange time when many people are not currently working. This is something that is not automatic and you have to call your lender to not only find out the specific details of what is expect from you, but also to set it up. Because of the CARES Act, it is fairly easy to qualify for. It is very important to know what the terms are from your lender – how long it lasts, what is expected of you, etc.
There has been a significant increase of people not paying their mortgage. April 2020 has been the “largest single-month increase every recorded, and nearly three times the previous single-month record set back in late 2008” according to Black Knight. This is baffling some experts since qualifying for forbearance is not very difficult.
Depending your lender, the forbearance options may vary. One forbearance option is that the lender accepts decreased payments for a number of months. Another option is skipping payments all together for a number of months and adding on those missed months to the end of your loan. No matter which option you choose, please remember that you will be responsible for paying the skipped or reduced payments. What you owe will not be erased.
You should also familiarize yourself with the CARES Act and how it pertains to you and your immediate situation. There are certain lenders (Fannie Mae, Freddie Mac, and a few others) where foreclosure cannot occur on your home for up to 12 months. The CARES Act does not apply to all lenders, though. Since this protection is temporary, not permanent, it is important to know where you stand with your lender.
It is recommended that you reach out to your lender as soon as possible if you are unable to pay your mortgage due to financial hardship from the virus. It is not a complicated task. Simply call your lender and they will be able to assist you!