The Coronavirus has led to some challenging times for all of us.
The Government has created the CARES Act, to assist homeowners whose income may have been adversely impacted by the coronavirus. One of the components of the CARES Act is the possibility of mortgage forbearance.
Forbearance is often misinterpreted. While it is intended to help, it can have some dangerous repercussions. Many people are mistakenly thinking that forbearance equals forgiveness. IT DOES NOT!
Forbearance means that the payments will be suspended for a short period of time, initially up to 6 months, but will need to be caught up when the forbearance period is over.
Think about when you buy something at a furniture store that offers “no payments” for 3 months. You still must pay for the furniture; the payments are just deferred.
Forbearance is designed to help those as a measure of last resort. It is not a free pass and may have serious consequences.
Please talk to your financial institution and ask as many questions as possible
• How will my information be reported to the credit reporting agencies?
• Is it a catch up period? What’s the time frame?
• Will my payments be added to end of the loan?
I’m not here to tell you not to don’t do it, it’s more of an informative message to look at other options.
If you have any questions for me don’t hesitate to reach out, I’m happy to see what I might be able to do to help!