Loans
Forbearance
A temporary agreement with your lender to reduce or pause mortgage payments during a period of financial hardship. Forbearance does not erase what you owe — you will need to repay the missed amounts later through a repayment plan, loan modification, or lump sum. Contact your lender as early as possible if you are struggling, as forbearance is easier to arrange before you fall behind on payments.
Why It Matters
Forbearance is a concept every mortgage borrower should understand before signing loan documents. The terms of your mortgage — including factors like forbearance — directly determine your monthly payment, total interest paid, and financial flexibility for the next 15-30 years. Taking time to understand these terms puts you in a stronger negotiating position with lenders.
When evaluating loan offers, ask your lender to explain how forbearance affects your specific loan scenario. Get it in writing on your Loan Estimate form, and compare how different lenders handle forbearance — the differences can save or cost you thousands over the life of your mortgage.
Real-World Example
For a typical $300,000, 30-year mortgage at 6.5%, understanding forbearance can help you evaluate whether you're getting the best possible terms. Even small variations in loan terms translate to significant dollar amounts over 360 monthly payments.
Pro Tip
Before your loan closes, make sure you fully understand how forbearance works in your specific mortgage. Ask your loan officer to walk through it — they're required to explain every term on your Closing Disclosure.