Mortgage Forbearance Options

A person holding a small house in their hands.

Forbearance is complicated. There isn’t a “one size fits all” because the options depend on many factors. Those factors include:
▪ The type of loan
▪ The owner or investor requirements in your mortgage loan
▪ Your servicer
There are key things to consider with each type of forbearance.
You’ll want to pay close attention to how your servicer expects
you to pay back any missed or reduced mortgage payments.

Here are some forbearance examples to guide you

Paused Payments Option-Paid During Existing Mortgage: Your
servicer allows you to stop making payments for six months, but
you must pay everything back at once when your payments are
due again.

A person using a calculator to calculate the cost of a home.
A person sitting at a desk with papers and a calculator.

What to consider:

▪ You may owe a big bill that comes due all at once. For example, if your servicer allowed you not to pay your mortgage
for six months, at the end of the forbearance period, you
may owe all six of your missed mortgage payments in one
month.
▪ Interest on the paused amounts will continue to accrue until
you repay them.

Mortgage Payment Reduction Option: Your servicer allows you
to reduce your $1,000 monthly mortgage payment by half for
three months. After the three months are over you have one year
to pay back the amount of that reduction.

A calculator and some papers on top of a table.

What to consider

▪ The amount of the reduction would be spread out over 12
months and added to your mortgage payment once the reduction period is over. This means your monthly mortgage
will increase during that one-year period. Using the example
above, you would pay $500 for three months and starting on
the fourth month you would need to pay $1125.00 ($1,000 +
$1500/12) each month for the next 12 months.
▪ Interest on any reduced amounts will continue to accrue until
you repay them.
Paused Payment Option-Paid back at End of Mortgage: Your
servicer allows you to pause payments for one year, and that
amount is repaid by either adding it to the end of your mortgage
loan or by you taking out a separate loan.

▪ You can extend the term of your loan for some amount of
time to pay back the paused payments or take out a separate loan.
▪ Extending your loan means the missed payments will be
added on to the end of your loan. For example if you were
given a twelve month period where you didn’t have to pay
your mortgage, you’ll have twelve months of payments
added on to the date when your loan was supposed to be
paid off by.
▪ Extending with a separate loan means when your mortgage
is due you’ll also have to pay off this separate loan. This is
like a balloon payment, which is one large payment due at
the end of your loan.
▪ Interest on the missed amounts will continue to accrue until
you repay them.