It’s common to see and hear people discussing the methods of how one should ideally act right now to refinance and mortgage rates are abysmally low.
Recently, I was able to help some clients to refinance their loans during and after forbearance period. Under CARES act, borrowers are able to defer or lower their payments for up to 180 days if they’ve been, in any way, affected by the pandemic. During the refinancing processing, many clients realized that current lenders added 2nd lien for all missing payments or adding all the missing payments to be paid in full before completing the refinancing process. One must be no longer in forbearance in addition to having outstanding debts be paid in full with a new loan.
As the year draws to a close, many federal protections that lower and/or pause payments for people are also timing out. This specific government benefit prevents anyone from applying after the December 31 deadline, so try to see if you qualify for this service before then by contacting a servicer.
Before this decision, though, it is important to weigh out whether one will be capable of paying off your mortgage after the New Year rolls around. It is a good idea to discuss with your trusted financial and/or loan professionals who can help you to understand the pros and cons of requesting extension of forbearance. Forbearance is not a cop-out. The required fees will still need to be paid, but during this time, no additional interest or fees will be added to your loan: effectively freezing it in time. As such, if possible, continue to make full mortgage payments to ease the load on yourself when the grace period ends.