One of the big challenges of the coronavirus pandemic is how it has shaped not the mortgage industry but also peoples’ financial ability to sustain mortgage payments. Credit risk is and was and is still currently an issue for many families and banks and lenders across the country. If you’re trying to refinance your mortgage and you did a forbearance on your mortgage here’s what you need to know…
If you want to refinance your mortgage the guidelines require you to pay off the deferred balance amount. So let’s say your mortgage payment is $2,000 a month. You have done a forbearance on the mortgage for the most recent last 6 months, totaling $12,000 of back payments on the mortgage loan.
To get a new mortgage loan of any kind you would either have to bring the deferred loan current money meaning you would have to bring money in full to pay off your lender or you need three months of consecutive mortgage payments made on the deferred loan.
When you do forbearance the balance of payments would then be tacked onto the principal balance of the home mortgage.
Using our example of $2k monthly mortgage payment above, now your loan is bigger by $12k you have to have three months of consecutive back-to-back mortgage payments made on that loan in order to be eligible for refinancing the mortgage. This goes for getting any other mortgage loan including a purchase loan. Any outstanding deferments on other mortgages you may have along with, other deferred consumer loans also must be brought current.
This is something to keep in mind if you’re thinking about refinancing your home or buying another one with mortgage loan financing.
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