A couple of weeks ago, I wrote explained the difference between a foreclosure and a short sale for distressed owners of real estate in Lake Havasu. If you’re struggling to pay your mortgage, these are not your only two options. One of the alternatives I briefly discussed was a mortgage forbearance. While this isn’t a “free pass” so to speak, it does provide a brief respite from paying your mortgage in order to get yourself back on track financially. But what is a mortgage forbearance and how does it help the Havasu homeowner?
Mortgage Forbearance and the Havasu Homeowner
What is It?
Mortgage forbearance is an agreement between the homeowner and the lender to suspend mortgage payments for a brief period of time. How long? That varies depending on the arrangement between you and your lender. Typically, it lasts about three to four months. Instead of forcing you to put your home on the Havasu real estate market to avoid a foreclosure or short sale situation, this helps you take a breath and regroup. Then, when things get back on track, perhaps you’ll still wish to sell your real estate in Lake Havasu. But you’ll be in a much better position to make that happen.
When Should I Request It?
As soon as you see an issue with making your regular monthly mortgage payment, you should contact your lender about a possible mortgage forbearance. Why? They’re more likely to work with you to when you’re a borrower in good standing. Wait until you’ve skipped a few payments on your real estate in Lake Havasu and they’re more likely to begin foreclosure proceedings than work with you on other arrangements. Plus, those late payments go on your credit, lowering your score and hindering your chances of buying another home, car, furniture or obtaining a credit card.
When you do talk to a lender, let them know why you’re having trouble. You got laid off from work. Your spouse was diagnosed with a deadly illness. Whatever the situation, explain exactly what’s going on and how much of a period of time you’ll need to get back on your feet. They may offer to do a loan modification first. If this works for you, go ahead and take it. If not, pursue the forbearance route. Stick only to the reasonable amount of time you think you’ll need and nothing more. It might make it easier for the lender to accept this temporary reprieve when they know you’re not trying to overstep your bounds.
Does a Mortgage Forbearance Affect My Credit?
According to FICO, a forbearance should not affect your credit score. However, the lender may report that you’re “paying under partial payment agreement”. This could lower your score a few points. But it is significantly less than if a foreclosure or delinquent payment on your real estate in Lake Havasu. So, if you are currently struggling to make your mortgage payments due to a temporary financial hardship, it wouldn’t hurt to contact your lender about making arrangements for a mortgage forbearance as soon as possible. Then, when you’re ready to put your home on the Havasu real estate market in the future, make sure to contact me.
Alexis Steel – 928-303-2199
Keller Williams Arizona Living Realty
Search homes at: www.TheHavasuHome.com