You may remain in your home for many years, and a lot can happen during that extended period of time. Unfortunately, some homeowners find themselves in a situation where making their mortgage payment on time is challenging or even impossible. If you are in this type of situation today, it is important that you understand the differences between forbearance and foreclosure.
Forbearance is a special agreement between the mortgage company and the borrower. The terms of forbearance may be unique to your situation, but they usually enable you to delay making your payments without a penalty for a short period of time. At the end of the agreed-upon forbearance period, you may be required to pay the missed payments and interest charges. For some people who are dealing with a job loss or large expenses, forbearance may be helpful in avoiding delinquency. Remember that delinquency can impact your credit rating and may lead to foreclosure.
Learning About Foreclosure
While a homeowner may request forbearance for temporary financial relief, foreclosure has serious consequences that a homeowner understandably wants to avoid. Foreclosure means that you have failed to keep up with your obligations, and the lender is pursuing his or her right to take back the property. The end of the process results in the loss of your home and a serious ding to your credit rating.
Are you struggling to make your mortgage payment? If you anticipate your challenges continuing, it may make sense to refinance your mortgage. Through a refinance, you could lower your payment and adjust your loan terms so that they are more manageable. Our lending associates at MortgageDepot are available to review your credentials and can tell you more about your lending options. Connect with one of our knowledgeable associates today to explore some of the affordable options available to you.
Contact one of our loan consultants for more information.