Pros and Cons of Mortgage Forbearance

Stressed about keeping up with your mortgage during tough times? You’re not alone! Many homeowners requested forbearance at the peak of economic uncertainty.

Forbearance can be a powerful short-term lifeline, giving you space to regroup financially. But like any financial tool, it comes with trade-offs. If you’re weighing your options, this guide walks you through everything you need to know, so you can make the most informed, confident decision possible.

• Mortgage forbearance provides temporary relief but is not loan forgiveness.
• It may impact your credit and prolong your repayment term.
• Forbearance can help avoid foreclosure during financial hardship.
• There are multiple repayment options after forbearance ends.
• It’s important to understand lender policies and your long-term goals.

Mortgage forbearance is a temporary pause or reduction in your monthly mortgage payments. It’s typically offered by your loan servicer if you’re experiencing financial hardship due to job loss, medical emergencies, natural disasters, or economic downturns.

While it can prevent foreclosure, forbearance does NOT mean loan forgiveness. You’ll still owe the paused payments eventually, just on a different timeline.

The CARES Act allows borrowers with federally backed loans to request forbearance with no penalty. Always confirm if your loan is covered.

If you're in a bind, forbearance gives you time to stabilize your finances without the fear of losing your home.

• Pauses or reduces payments temporarily
• Offers time to catch up financially
• Avoids foreclosure and delinquency reporting (for certain loans)

Under federal programs, servicers can't charge late fees during an approved forbearance period.

When your forbearance ends, you may be able to:

• Resume payments with a repayment plan
• Add skipped payments to the end of the loan (deferral)
• Modify the loan terms permanently

Federally backed loans won't be reported as delinquent during forbearance. However, private loan servicers may differ—ask for clarity.

Forbearance only delays payments—you still owe every dollar missed.

Some lenders require a large lump-sum payment at the end. Others offer gradual repayment—confirm with your lender.

If not properly reported, or if you're not in a formal agreement, your credit could take a hit.

Paused payments mean your balance stays stagnant, which can delay equity growth.

Some lenders may require borrowers to wait 3–12 months after forbearance before refinancing.

Forbearance isn’t meant for long-term relief, but in the right situations, it can be a smart move. Here are a few common scenarios where it may make sense:

• Temporary loss of income (e.g., furlough, medical leave)
• Disaster recovery (e.g., natural disasters, pandemics)
• Need time to sell the home or refinance

Heads up: You must contact your loan servicer to officially request and document forbearance.

When your forbearance ends, you must work with your lender to choose a repayment path:

• Full Repayment: Not always required immediately.
• Repayment Plan: Spread payments over 6–12 months.
• Deferral: Add missed payments to the end of the loan.
• Loan Modification: Restructure the loan for affordability.

Ask your lender for a breakdown of all available options.

• Consumer Financial Protection Bureau (CFPB) Guide
• VA Forbearance Information

Forbearance can be a lifeline during difficult times—but it’s not a cure-all. We always recommend speaking to a mortgage advisor to understand how it affects your long-term homeownership goals.

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Forbearance pauses payments temporarily. Deferment often refers to adding missed payments to the end of your loan term. Both are repayment relief options, but differ in structure.

Not necessarily. Repayment terms vary by lender. You may qualify for gradual repayment or deferral.

If your forbearance is approved and reported correctly, federally backed loan forbearance should not harm your credit. Still, always double-check with your lender.

Yes, but you may need to complete a waiting period—often 3 to 12 months of on-time payments post-forbearance.

Call your mortgage servicer directly. Be prepared to explain your hardship and ask about available repayment plans.

• This blog is for informational purposes only and does not constitute financial advice.
• Mortgage loan availability, terms, and repayment options vary by lender and investor.
• Be My Neighbor Mortgage, LLC is a licensed mortgage lender, NMLS #1743790.
• realpha is a home-buying platform and not a mortgage lender or broker. Commission-free refers to buyer agent commission and may not reflect total transaction costs.
• Always consult with a licensed mortgage professional before making loan-related decisions.