Forbearance, only do it if you absolutely have to. Some people are taking a Forbearance on their mortgage as a way to take a break on their mortgage payment when they really do not need to.
But forbearance does not mean you can skip mortgage payments and never pay them back. You have to repay any missed or reduced payments in the future. So, if you’re able to keep up with your payments, keep making them.
Taking a forbearance will also impede your ability to refinance. Having a forbearance on your credit report means you cannot get a new mortgage. You would have to bring the loan current.
With rates as low as they are now, many people are refinancing. Sometimes we find out after pulling a credit report that we need to pause the refinance while someone who has taken a forbearance brings the loan current. And this takes much more time than you would think.
Waiting for a loan to come out of forbearance and be brought current risks us not making the deadline on a locked-in interest-rate terms and risks ruining the potential refinance. We only have so many days to close a refinance, and having to wait as much as two weeks to clear up a forbearance may take too much time.
If you are suffering job loss due to the pandemic and absolutely have to take a forbearance, that is understandable. But please understand the repercussions.
Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.
