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is mortgage forbearance your best option this is what we want to figure out today so i'm going to go through this slide deck really quickly with you um that way it's in print and you can hear it and i'm going to go over a couple of the details with this to make sure that you're on the right path here so in in the recent months we all know that a lot of us have found ourselves unable to pay our bills due to um being laid off furloughs and health concerns that's uh quite evident once that you know that paying your mortgage is going to be difficult this is the biggest deal take action like immediately um we know that things are are rough and and they've been rough and probably not going to get better too much you know too too much too quick all right so uh let's see if forbearance is your best option are you experiencing a temporary hardship because mortgage forbearance is actually designed to be a very temporary fix um over a short period of time if you're having trouble paying your loan right now currently uh it typically lasts about six months and there's quite a possibility that you might be able to get another six months as well depending on on the situation and depending on who holds your dope a temporary hardship can be defined as one that you should recover from by the time that the forbearance period is over so the bank one size fits all has determined that a six-month window should get everybody through or with the addition of another another six months as well um work furloughs and layoffs are an example of a hardship that can be overcome with within this time so generally speaking we thought that you know within six months everything would be back on track so certain health issues that prevent you from working could also fall into this category and now keep in mind that lenders could ask you to verify that the you know that the hardship is temporary and they may request information about your current employment status they also want to know um about your income and assets so they're not just gonna potentially give you a forbearance because you're requesting it there might be some you know some loopholes that you have to jump through or some information that you might need to provide now we want to make sure that you don't have some other financial resources that you can step into in lieu of the forbearance so since it's meant to be a last resort um before before you you know before you risk foreclosure on your home so this is not like hey you want a holiday from making your house payment there's gonna be ramifications to this uh it's not gonna be um just a simple thing that you do and and then it just goes away it could have long lasting you know an impact on you so for this reason homeowners are encouraged to explore every possible option to continue making payments this might make it necessary to pull funds from retirement or savings you know and i know that costs money your 401k it's going to cost money to pull it out but you know save your home don't go into forbearance pull that money out we've already had some clients that have had to do that they actually had to go backwards and make their payments with their 401k to bring their house payment current so that they could go into a refi and that'll come up here in a second too so family members are sometimes willing to help out with a loan and a cash gift we all know that we don't want to ask our family for help but they might be able to get you through a month or two you know of having either lower income or no income at all can you still cover a portion of your mortgage payments you know so if you can you know so mortgage forbearance plans take several different forms some homeowners can work out an agreement that allows them to only pay the loan or the interest for what you know the loan interest for a while so that might also assist you um so they would take the uh you pay them the the interest upfront which is what they're you know worried about and tack that the rest of it on to the back which will earn the bank some more money so that's you know why they might be willing to do that so others may make may make partial payments or skip them completely it is typical typically best to continue to make some type of payment on home loans so again you know this is not a holiday this demonstrates responsibility to lenders and you will have less money to repay when the forbearance period is over obviously so have you looked at your other options refinancing your loan for a lower interest rate may help you be better able to afford the payments so again this might be the option you try prior to doing a forbearance so what i'm finding is that by the time everybody realizes that they want to do that refinance it's too late because they did the forbearance and this might be an option if you have been making your payments on time every month and can be and can get a better interest rate on the loan so next question will you be able to manage the repayment plan so again the banks weren't truly explaining this to people in the very beginning they were just simply saying hey do you want a forbearance and they said you can skip payments so being human we here want to skip payments and we don't even say well how do i make it back up what are the details of the forbearance plan so um you wouldn't think this is happening but i'm running into this constantly now where a forbearance is an issue hey we didn't forbear our house why for but i went into forbearance for my student loan i went into forbearance for my car loan these are going to cause you issues for buying a house or refinancing your current loan so the forbearance agreement includes an outline of how lenders expect borrowers to repay their mortgage payments when the forbearance is over that's what we just talked about some require a lump sum payment to cover the previous months of payments so this is the worst case scenario where the example before i miss six payments of let's go two thousand dollars you know now you owe twelve grand on month seven plus the two thousand that you're going to owe for month seven anyway so now you're looking at fourteen thousand dollars this is the big one that people are getting hit with so now other banks are going to allow you to miss payments to be tacked on to the end of the loan so this would be the best case scenario you know kind of sort of so where you just take all that stuff and put it on the very end of the loan now this will have an impact if you decide to sell the house this is going to affect your bottom line you might also be able to divide up what is owed and add it to your regular monthly payments that is as we discussed earlier as well let's say they just take it and you know we're just gonna say you owe 500 extra a month but remember where are you going to be in six months or 12 months is that going to be feasible to go from 2000 a month to 25 or 3 000 because i'm sure they're not going to go with the lower amount you know first they're going to try to get as much money as possible all right so uh big issue big point here making sure you can honor this agreement preserves your credit history and prevents future issues with getting a home loan so this is probably the second big deal behind you know after you've made that decision how you're going to get those payments how you're going to repay those payments this is this is the biggest decision here or not the decision but this is the biggest thing here is to honor this agreement because you were doing well prior to the forbearance you want to make sure that you sail out of the other side of this forbearance looking just as beautiful as you did when you when you went into it so the decision to seek forbearance is not one to take to make lightly obviously depending upon your financial situation you may you may be able to make other arrangements to cover your house payment the important thing is again to take action now make that decision now because things aren't going to get easier as you move into the future you know uh keeping your home underneath you is going to keep everything stable for you it's going to keep that stable environment for you to come home to it's going to make a lot of the other things that are happening around you that are out of your control easier to control in the meantime so demonstrating your desire to uphold your responsibilities as a borrower helps you to maintain good standing with the lender so to recap here you want to make sure that that forbearance is the best option for you you absolutely want to make sure it is the best option for you i'm going to say that twice so after you've made the decision to do so you want to find out how they're going to do how they're going to deal with the missed payments and so putting them on the end of the loan would appear to be the best solution but i don't know what particular situation you're in it's going to be a math equation for you the other thing is too the one thing that i didn't mention in the slide presentation this forbearance is going to be on your credit report with the three major bureaus it is going to say that your house payment is in forbearance this is going to affect any borrowing decision that you need to make period industry to go ahead and recap what we've been talking about here is forbearance the best option for you you've got to make that personal decision but you got to make it quickly and the first thing you got to take into consideration is how are you going to do the forbearance where is that money you owe going to go at the end of the loan in one lump payment within a couple of months or are you going to try to spread it out so the one thing that i didn't cover in the slide deck is that once you make a decision to go into forbearance that is on your credit report i am in forbearance with my home loan i am not making my home loan so if you decide to do a refinance or you decide that you want to make a purchase or sell that home the first thing they're going to do is pull that credit report or when they do pull that required report it's going to say right there i'm in forbearance that means you can't get much of anything else for loan so make the decision quickly decide how you're going to handle it and uh look at every other option you have first make sure that you don't have some money you can pull from a 401k make sure that you don't have money from the family that you could go get it's imperative that you understand that this is going to kind of put you into a a little bit of a limbo area where you're unable to make other financial decisions that you may need to make for your family so that covers forbearance for today um reach out to us anytime my name is cory model mortgage lifestyles my number cell phone number is seven 702-204-077 thank you