orange house on a hill

How Does Mortgage Forbearance Work?

Mortgage forbearance is the process of suspending your loan payments temporarily in the case of financial hardship. In most cases, this won’t cause any additional fees, penalties, or interest beyond the normal scheduled interest amounts, and requires no extra paperwork. 

After discussing the forbearance guidelines with your mortgage company, your period of suspended payments begins and you can get back on your feet financially. 

Here’s everything you need to know about mortgage forbearance agreements.

[Related: What Prospective Buyers Need to Know About Amortization]

What Doesn’t Mortgage Forbearance Mean?

Although you’re suspending your payments with mortgage forbearance, this isn’t a permanent solution. Forbearance doesn’t mean that you are done paying off your mortgage, or that any part is eliminated — they’re simply shifted forward. 

Mortgage forbearance agreements are designed to provide assistance and relief to borrowers with temporary financial problems. 

After the forbearance period is over, you will need to continue your payments as well as pay off the missed payments over time. Your lender will discuss repayment options for the halted payments with you before your period of forbearance is up.

[Related: Why Real Estate Is the Best Long-Term Investment]

Who Is Eligible for Mortgage Forbearance?

Forbearance can provide financial assistance for those dealing with temporary hardships. If you’re behind on your mortgage payments or on the verge of missing payments, you can also qualify for mortgage forbearance. 

Most borrowers who qualify for temporary payment relief are experiencing hardships such as:


To be eligible for COVID-related mortgage forbearance (CARES Act), you must have a federally backed home loan. These include HUD/FHA, VA, USDA, Fannie Mae, and Freddie Mac loans. For the CARES Act, no hard proof of hardship is required besides a conversation with your lender explaining your circumstances. 

This legislation doesn’t cover loans that aren’t federally backed, so those with private loans may have to contact their loan officers on a case-by-case basis. 

[Related: How to Avoid Being House Poor]

What Are the Benefits of Mortgage Forbearance?

The main benefit of mortgage forbearances is obvious. You will be able to take a pause from making payments and have time to recover financially. 

Rather than completely eliminate your mortgage payments, certain forbearance agreements can also lower your payment to make it more manageable temporarily. 

Mortgage forbearances are also less damaging to your credit score than a foreclosure, and allow you to remain in your home.

[Related: Buying Foreclosed Properties in Washington State]

What Is the Mortgage Forbearance Process?

The mortgage forbearance process is fairly straightforward. Before applying for forbearance, make sure you have all of the following financial documents and loan information on hand:

  • Mortgage statements
  • Second mortgage information if applicable
  • Other monthly debt payments, including car loans, student loans, and credit card payments
  • Income details and proof of income such as pay stubs and income tax returns

You will then need to contact your mortgage company and let them know that you are interested in a forbearance agreement to see if you qualify. They will go over the terms of the agreement, including the length of time (typically three to six months), the payment amount (if reduced instead of suspended), and the terms of repayment for when the forbearance period ends.

[Related: Tips for Choosing the Right Loan Terms for You]

How Do I Repay Missed Payments Due to Forbearance?

Since a forbearance agreement does not permanently eliminate your payments, you are going to need to repay missed payments beginning on the date specified by your loan company. 

You do not have to pay back all missed payments in one sum (although you do have that option). Your loan company will discuss a repayment plan with you, allowing you to make slightly larger payments every month until the missed payments are completed, or move your scheduled loan end date further into the future.

[Related: Resources: Rate Watch]

Learn More 

Are you dealing with financial hardship and would like some relief? Contact your mortgage company today to see if a forbearance agreement is a viable option for your situation. 

If you’d like more information, or are interested in refinancing your mortgage loan, contact Seattle Mortgage Planners.

Share This

Copy Link to Clipboard