How to defer a mortgage payment?

When it comes to finding out how to defer a mortgage payment without defaulting or having a late payment reported to the credit bureaus, the best answer you’ll get is from your mortgage lender. There are no hard and fast rules on how, when and why you can defer a mortgage payment. But mortgage lenders understand that borrowers can unexpectedly fall upon tough times, and in most cases, they would rather give you some temporary relief, rather than go through a lengthy, complicated and expensive foreclosure.

When a mortgage lender and a borrower agree upon a mortgage modification or a temporary deferral of mortgage payments, this is called a mortgage forbearance. Mortgage forbearances are temporary terms by which borrowers can continue showing their good faith and intentions to pay off their loan even though they are financially unable to do so. In exchange, the mortgage lender withholds late fees, foreclosure or reporting of negative activity to the credit reporting agencies.

Mortgage loan forbearances are you usually given in cases where:

the borrower has fallen ill or been injured, such that he or she cannot work
the main income earner in a household has passed away unexpectedly
the borrower was impacts by a natural disaster or some other catastrophic event
the borrower has been laid off

Your chances of successfully getting a mortgage forbearance from your mortgage lender hinge upon two factors: (1) how good your payment history has been up until this point and (2) how soon you contact your mortgage lender after learning of an upcoming financial hardship. For example, if you have been timely on all of your payments and you learn that you’ll be laid off at the end of the quarter and you call your mortgage lender immediately, you’ll likely be able to work something out. On the other hand, if you are consistently late on your mortgage payments and you are injured, but do not call until two months later when your savings run out, the lender may not be so forgiving.

At any rate, you’ll need to prove the extenuating circumstances that led to your financial hardship (i.e. a doctor’s note, pink slip, insurance claim report) and sign a letter (i.e. a Hardship Affidavit) stating your situation and your intentions to work your way out of it. Mortgage forbearances usually come in the form of reduced payments or late fees, or deferred payments, where the interest is simply added on to your principal. You can usually pay higher payments after you get back on your feet to “catch up.”

A mortgage forbearance is usually preferable to a mortgage modification or mortgage refinance. But if your situation has changed permanently, you may wish to consider one of these options. Look into some of the government sponsored programs through the FHA for relief from unaffordable mortgage loans.