Yes, you can sell your house while in forbearance.
It’s a commonly asked question.
Can you sell your house while in forbearance?
The answer is that you can sell a house in forbearance.
Are you in forbearance and need to sell your house?
If so then this article is for you.
I BECAME AN EXPERT ON FORBEARANCE AND THIS IS WHY
Early on I learnt all of the details about homes in forbearance because I was getting calls from home-owners wanting to sell to me!
I have dealt with many people selling their homes in forbearance since then. This is because I am a professional home buyer. I learned all there is to know about selling a house in forbearance so that I could help people out if they needed.
Today I want to share the information with you.
Sell My House in Forbearance
How to sell your house that is in forbearance
The topics that I will cover today include:
- Understanding forbearance. What is it? What does forbearance mean?
- How does forbearance apply to your situation?
- Who can buy my house in Forbearance
- Why sell my house in forbearance
- When should I sell my house in forbearance
- Options other than selling your house
Table of Contents
Understanding Forbearance
Believe it or not mortgage forbearance isn’t new. However er it became increasingly popular as the pandemic shut down our economy and people lost jobs.
Because of this many people got behind on their mortgages.
ENTER MORTGAGE FORBEARANCE
What is forbearance
Mortgage forbearance is when your bank lets you stop making payments for a short period of time.
The payments you don’t make now are added to the end of the mortgage.
Because of mortgage forbearance, many homeowners were able to keep their homes despite being out of a job.
This is a much better option than missing payments and then having the bank foreclose on your house!
There are some things you can negotiate with your lender as you enter forbearance including:
- Repayment plan – will you make up the payments that you miss and keep the loan period the same
- Deferral forbearance – missed payments are added to the end of the mortgage. You will have to pay slightly more interest too because now the loan is longer.
- Modify your loan – A loan modification is when you change the terms of your loan. Maybe you negotiate to pay less per month but pay it off over a longer time. Possibly you can renegotiate the interest rate which could reduce you monthly payments.
- Reinstatement forbearance – is when you agree to make a one time payment at the end of the forbearance period. Tis Lump sum payment is to catch up on the mortgage payments that you missed.
How Does Forbearance Apply to Your Situation
Depending on your financial situation you have options. You can choose any of the above forbearance options.
Of course, you need to stay in close communication with your lender.
Once you are in forbearance you may be wondering if you can still sell your house.
The simple answer is yes you can.
And selling a house in forbearance is common because many people worry about getting behind the monthly payments again. Instead of risking losing their home to foreclosure, they want to sell it.
How long is forbearance?
The length of mortgage forbearance varies. It is decided between you and your lender. Typically I have seen the length of forbearances range from 6 months to 2 years.
How does mortgage forbearance affect selling a home
In short, a mortgage forbearance doesn’t affect the process of selling your house at all.
What really affects how you sell your house is your plan and goals.
Are you looking to sell fast?
Do you want to sell your house without fixing anything?
Perhaps you want to sell your home for cash (cash for houses is becoming increasingly popular).
Regardless of your goals, you need to work with an expert in real estate that you can trust. I buy houses in forbearance and I have a proven track record.
If you would like to discuss plans on how to sell your house in forbearance with an expert all you need to do is fill out a form or give me a call on (720) 418-8670. I am here to help you!
FAQ: What are the FHA loan limits in Colorado?
The FHA loan limits in Colorado vary from county to county. For an up-to-date guide on the maximum lending limits in Colorado set forth by the FHA be sure to check out this guide.
Why Sell My House in Forbearance
“I wasn’t sure that I was going to be able to make payments after the mortgage forbearance. It just made sense for me to sell my house.”
The reason why many people sell their homes while in forbearance is that they are worried about having to make mortgage payments after the forbearance is lifted.
You don’t have to sell a house in forbearance. In fact, I would say that if you get a new job and can keep your house that would be a really good financial decision to make because real estate is a great way o build long-term wealth.
Who Can You Sell Your House to?
You can sell your house in forbearance to anybody. You can sell it:
- On the MLS with an agent
- FSBO
- To a real estate investor
- Cash home buyer
Most often people who sell homes in forbearance sell them to investors or cash buyers. This is because the seller is short on cash and wants to sell the house without fixing anything.
This is compared to traditional buyers who like move-in ready, right?
When Shoud I Sell A House in Forbearance?
When you should sell a house in forbearance is if you don’t think you will be able to make the payments once the forbearance lifts.
BECAUSE if the forbearance ends and you get behind on your mortgage again the bank will foreclose on your house and sell it at auction.
So if you sell before this happens you will save your hard-earned equity and walk away with cash in your pocket
Pros and Cons of Mortgage Forbearance
Pros
- Defers your mortgage payments to when you can afford to pay them again
- Can lower your monthly payment temporarily too
- You can still sell your home
- You can use the forbearance period to refinance your mortgage
- Flexible options
Cons
- You have to make up missed payments
- Payments might increase when it ends
- Depending on the type of loan this may not be an option for a rental house or second home
Bottom Line
Can I Sell My House in Forbearance?
Yes, you can sell a house while it is in forbearance.
In-fact it may be a really good idea depending on your finances. That said never forget that owning your home, or any real estate, can be a great way to accumulate wealth and save for retirement.
AND REMEBER a forbearance is not automatic. You have to ask for it.
Talk to your lender
You can’t just stop making payments because if you do they may foreclose on your house.
You need to talk to your lender first.
You need to ask about mortgage forbearance to be given it.
Other useful resources:
More stuff about mortgage forbearance that I found useful.
- An article by Bankrate.com
- An article by Nerdwallet.com
- Government mortgage relief options
- More expert details about mortgage forbearance here
