Mortgage Deferment and Mortgage Forbearance—Is There a Difference?2020-04-082020-04-22https://www.hoosier-realtors.com/wp-content/uploads/2016/09/Hoosier-Logo.pngHoosier, REALTORS®https://hoosier-realtors.com/wp-content/uploads/2020/04/mortgagedeferment.png200px200px
With finances in peril due to COVID-19, many homeowners are in search of mortgage relief. Two strategies that many borrowers are anxious to invoke right now are mortgage deferment and mortgage forbearance.
Both tactics allow a borrower to skip monthly payments for a set period. Depending on the lender, there can be subtle differences between the two terms.
“We are seeing the terms being used interchangeably,” says Sara Singhas, the director of loan administration for the Mortgage Bankers Association.
She adds that both tactics allow a temporary period during which a borrower need not make contractual monthly payments. The differences between the two strategies come at the end of that period.
“What happens at the end of the forbearance period is the amount of payments that you missed during that forbearance will be due in a lump sum,” says Singhas.
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