During that time, the lender will either reduce the amount of money owed on each payment or even suspend payments altogether. In exchange, you agree to pay an additional amount at the end of that timeframe in order to stay current on the amount owed. For example, if payments are suspended for six months, you are expected to pay off those six months of missed payments when the time period is over. A lender can set its own terms for how you make up the money that is owed.
Forbearance agreements are often beneficial for people who are experiencing a temporary hardship. Someone who has lost his or her job may not have the money to pay the mortgage during the job search but could make up the difference once obtaining employment.
To obtain a forbearance agreement, you should speak with your lender. There are a number of mortgage relief agencies that try to help consumers in your position, though going through your lender first may be the best option.
As the Federal Trade Commission points out, if you are in need of mortgage assistance and choose to work with a relief agency, there are certain rules by which the organization must abide, such as the following:
- They must let you know of any consequences to not paying your mortgage.
- They may not charge you upfront fees.
- They must let you know the cost of their services and that they are not associated with your lender.
While this information may be useful, it should not be taken as legal advice.