A mortgage forbearance plan may look attractive if offered to you at the time when you’re struggling to pay your mortgage loans. But sometimes, the offer might be a trap and not a solution to your existing problem. There are a lot of options at the disposal of homeowners struggling with mortgage payments. Unfortunately, a lot of people take the option of mortgage forbearance as their loan modification help because they feel like they don’t have any other option. Thus, it’s necessary to learn about all the different choices available so that you know the ones you qualify for, how they work and the most suitable option for your situation.
Most banks and lenders offer the forbearance plan but not other loan modification options available for the delinquent borrowers because it’s advantageous to them. In fact, the offer is usually made tempting by the fact that you are not allowed to make payments for a certain amount of time. The leniency time frame is highly dependent on the type of loan you have. For example, a FHA loan will be given about 6 to 12 months. The reasoning behind this it that it should give you enough time to bounce back and resume to regular payments. Sadly, the missed mortgage payments during the leniency period are not forgiven and will be added to your debt.
Why Is a Forbearance Plan Not a Good Option?
A forbearance plan is only a good option for a borrower who expects to be able to return to regular payments after a while. A temporary financial mishap, like illness can make you a good candidate for this plan. However, loanmoddepot.com suggests permanent loan modification options for a long-term solution. The HAMP program that’s offered by the government is a great loan modification option for a struggling borrower. You will have to be assessed to qualify for this program, so it’s best to do ask for help early to avoid missing out.