How do you qualify for mortgage forbearance?
Lenders have their own procedures and practices around mortgage forbearance. That’s true of every lender type, from mortgage lenders for first time home buyers to refinance lenders. If you’re having a tough time making your loan payments, first, talk to your lender. There are certain legal protections that might apply to you.
Mortgage forbearance CARES Act
The CARES Act provides mortgage forbearance to any homeowner with a federally-backed mortgage. During the pandemic, your lender cannot deny your forbearance request, nor can it demand proof of financial hardship.
Most U.S. mortgages are federally backed. Loans issued under the FHA, VA, or USDA programs qualify. Since 95% of mortgages on single-family homes in the U.S. fall into one of these categories, there’s a good chance your mortgage is eligible for COVID-19 mortgage forbearance.
Some mortgages, such as jumbo loans, aren’t federally backed. However, your mortgage servicer may well be willing to work with borrowers who need help. Even if you don’t qualify under the CARES Act, call your mortgage servicer to discuss your options.
When does forbearance end with the CARES Act?
The CARES Act initially set forbearance protection to expire on Dec. 31, 2020. However, the program has since been extended to March 31, 2021, and more recently extended until June 30, 2021. Keep in mind that March 31 is the deadline to request forbearance. The date your forbearance period ends is 360 days from the day it begins.
Is there an extension on forbearance?
The time to request an extension on forbearance has already been extended to June 30, 2021. This includes FHA loans.
What to do when your CARES act mortgage forbearance ends
When your forbearance period ends, you need to start making payments on your mortgage again to catch up, as per your agreement with your lender. If you can’t make the payments, ask your lender for options — you may be able to modify your loan to make it more affordable.
View more information: https://www.fool.com/the-ascent/mortgages/what-is-forbearance/