A mortgage payment deferral is when then lender agrees to move one or more payments to the end of the loan. The borrower typically must resume the full payment during the next scheduled due date and usually must pay the escrow amounts due, if any. The deferred amount is generally due as a lump sum at maturity or when your final payment is due. The terms of the agreement will vary among customers and situations.
A mortgage payment deferral is not a long-term solution for delinquent borrowers; it is designed for borrowers who had a temporary financial problem and cannot pay the past due payments but can continue making the regular payments going forward..
Benefits of a payment deferral:
To see if you qualify for a mortgage payment deferral, give us a call. We’re here to help!
Payment Deferral vs. Loan Modification
While a mortgage payment deferral provides short-term relief for borrowers, a loan modification agreement is a permanent solution to unaffordable monthly payments. With a loan modification, we can work with customers to do a few things (such as reduce the interest rate, convert from a variable interest rate to a fixed interest rate or extend the length of the loan term) to reduce the monthly payments.
In order to be eligible for a loan modification, the customer must show that he or she cannot make the current mortgage payments because of financial hardship, demonstrate that he or she can afford the new payment amount by completing a trial period and provide all required documentation. The documentation required could include a financial statement, proof of income, tax returns, bank statements, and a hardship statement.