Since the COVID-19 outbreak, millions of people have been struggling financially. There has been an increasing number of jobs lost since lockdown was declared. Due to this, many people have struggled to continue paying their mortgages and have considered if forbearance is the way to endure the current situation.But is postponing your mortgage payments wise? Let’s first explore what forbearance is.
What Is Forbearance?
Forbearance is a temporary suspension of mortgage payments. This is a type of repayment relief in which the lender agrees to receive little to no payment from the borrower, possibly instead of making the borrower go into foreclosure.
Forbearance is a treaty solely between the lender and the mortgage owner, in which they decide the grace period. The agreement takes place when the borrower is going through:
- Unexpected illness or injury that increases healthcare costs
- Job loss
- Death of a loved one
- Any other situation that impacts the person economically
Whichever is your case, you must demonstrate to your lender why you need a repayment postponement.
Is This Your Best Option?
It’s vital to consider your options when going through this situation. To make your choice, you have to know where you stand and your future possibilities. Once you and your lender agree on forbearance, you still have to continue payments after.
This could be an advantage since you don’t have to spend money on your mortgage loan. You could use it on basic needs, like paying your bills and basic necessities instead.
However, with COVID-19, everyone’s financial condition is uncertain. If you have lost your job because of the economic crisis, you may not know how long it will take to find a new job and become financially stable again. Therefore, having more debt during this time is not a good idea.
What Option Would Suit You Better?
Selling your home could be the way to avoid paying your mortgage loan, and therefore, avoid forbearance. There are home buyers that can buy your home regardless of whether you have a mortgage loan.
At Colorado Cash For Keys, we’ve helped thousands of Colorado homeowners get out of sticky situations, including mortgages and debts. We review your particular case and provide you with the best solution. We can buy your home fast and easy, and no extra money has to ever come out of your pocket.