Mortgage Forbearance: What It Is and When to Request It

Financial hardship can arrive unexpectedly for any homeowner, whether through job loss, medical emergency, natural disaster, or other circumstances. When a homeowner cannot make their mortgage payment, the options and consequences are not always understood, and the fear of doing the wrong thing can lead to inaction that makes the situation worse.

Mortgage forbearance is a specific option that allows a temporary pause or reduction in mortgage payments during a defined hardship period, without triggering immediate foreclosure proceedings. Forbearance became widely known during the COVID-19 pandemic when millions of homeowners utilized the CARES Act forbearance provisions. But forbearance has always been available outside of national emergencies for homeowners experiencing genuine financial hardship.

This guide explains what forbearance is, what happens to missed payments, how it affects your credit, when to request it, and what the alternatives are for homeowners who need relief.

How Mortgage Forbearance Works

Forbearance is an agreement between the borrower and the mortgage servicer to temporarily reduce or suspend required mortgage payments during a defined period of hardship. The agreement is documented in a forbearance agreement that specifies the duration, the reduced or suspended payment amount, and the repayment plan for any missed payments.

Forbearance does not forgive the missed payments. Interest continues to accrue on the unpaid balance during the forbearance period. When the forbearance ends, the borrower must resume making regular payments and must resolve the unpaid amounts from the forbearance period through one of several approved repayment methods.

The duration of forbearance is typically three to six months initially, with the possibility of extension for additional periods for borrowers who qualify. During the COVID-19 pandemic, CARES Act forbearance allowed up to 18 months of forbearance for federally backed loans. Standard forbearance programs are shorter, typically three to twelve months depending on the lender and the nature of the hardship.

The Credit Impact of Forbearance

Properly documented forbearance agreements should not result in negative credit reporting for missed payments during the approved period. Servicers who report a mortgage as delinquent during an approved forbearance period are violating their agreements, and borrowers can dispute such reporting.

However, the credit impact depends on how the forbearance is reported. Forbearance itself may appear on the credit report as a notation without harming the score, or it may cause a temporary score reduction depending on the reporting methodology. The situation is less damaging than actual delinquency but may affect some scoring models or lender evaluations during the forbearance period.

Applying for new credit during or shortly after a forbearance period may be more difficult because lenders manually reviewing your credit file will see the forbearance notation. Mortgage refinancing in particular may be unavailable or more restricted during and immediately after a forbearance period.

When to Request Forbearance

Contact your servicer as soon as you know you cannot make an upcoming payment or are reasonably likely to have difficulty. Do not wait until you have already missed multiple payments. Servicers typically have more and better options for borrowers who contact them proactively before default than for those who have already missed several payments.

Forbearance is appropriate for temporary, resolvable financial hardship. Job loss is a common qualifying event, as is a medical emergency that temporarily eliminates income. Natural disasters affecting the property or your ability to work also qualify. The key characteristic is that the hardship is expected to be temporary and that you have a reasonable expectation of resuming payments after a defined period.

Forbearance is less appropriate for financial hardship that appears to be ongoing or permanent. If your income has permanently decreased to a level that makes the current mortgage payment unaffordable, a loan modification that permanently adjusts the payment to an affordable level may be more appropriate than temporary forbearance.

How to Request Forbearance

Contact your mortgage servicer by phone, online account, or written request. The servicer is the company to whom you make your monthly payments, which may be different from the lender who originated your loan. Have your loan number, current financial information, and a clear description of your hardship ready.

Be specific about the hardship and the expected duration. Servicers need to understand both the nature of the hardship and the anticipated resolution timeline to offer the most appropriate assistance. Vague requests for help produce less effective responses than specific descriptions of the situation.

Request everything in writing. Ask for a written forbearance agreement that specifies the duration, the reduced or suspended payment amount, the interest treatment during the period, and the repayment plan options. Review the agreement carefully before agreeing to the terms.

Final Thoughts

Mortgage forbearance is a valuable safety net for homeowners facing temporary financial hardship. Used appropriately, it prevents delinquency and foreclosure while the hardship resolves, buying time without the catastrophic credit consequences of a missed payment cascade or foreclosure.

The most important action is to contact your servicer early, before missing payments, and to fully understand the repayment obligation that comes at the end of the forbearance period. Forbearance is not forgiveness; it is a deferral that must be managed thoughtfully to avoid converting a temporary problem into a permanent one.

If you are facing financial difficulty, reach out to your servicer and explore all available options. The worst outcome is usually the result of inaction rather than of requesting help.