Can You Defer a Mortgage Payment? What to Know

A mortgage payment deferral offers homeowners a temporary solution during financial hardship by allowing a pause or reduction in monthly mortgage payments. This arrangement is a temporary postponement, not a forgiveness of the debt; the homeowner remains responsible for the full amount owed later. These options provide relief during unexpected financial challenges, helping individuals maintain homeownership and avoid foreclosure. Understanding deferral options and their implications helps navigate economic difficulty.

Understanding Mortgage Payment Deferral Options

Forbearance is a temporary relief option allowing you to pause or reduce mortgage payments for a set period, ranging from three to twelve months. During forbearance, interest continues to accrue on missed payments, meaning the total amount owed can increase. This option is utilized during short-term financial distress, such as job loss, illness, or natural disaster.

A standalone payment deferral adds missed payments to the end of the loan term. Deferred payments do not accrue additional interest, and the homeowner resumes regular monthly payments once the deferral period ends. The deferred amount becomes due when the loan matures, the property is sold, or the loan is refinanced. This deferral is used after a forbearance period to help bring the loan current without requiring a lump-sum payment.

Loan modification represents a permanent adjustment to the original mortgage terms. This can involve reducing the interest rate, extending the loan term, or capitalizing missed payments into the principal balance to make monthly payments affordable. While a loan modification can include deferring payments, its primary purpose is to restructure the loan for long-term affordability. This option is considered for those experiencing longer-term financial hardships.

Repayment plans offer a structured approach to address missed payments by catching up on overdue amounts over a shorter period. With a repayment plan, missed payments are divided and added to your regular monthly payments for a set number of months, six to twelve months, until the past-due amount is repaid. This option is suitable for homeowners who experienced a temporary setback but can now afford slightly higher payments to get back on track.

Assessing Eligibility and Preparing Your Request

Before requesting mortgage payment deferral, understand the eligibility criteria and prepare documentation. Lenders require homeowners to demonstrate a verifiable financial hardship preventing mortgage payments. Hardships include job loss, significant income reduction, or unexpected medical expenses. Your payment history and loan type (conventional, FHA, VA) also influence eligibility, as criteria vary by servicer and loan program.

Gathering financial documents supports your request and streamlines the review process. You will need proof of hardship, such as a termination letter, medical bills, or natural disaster documentation. Financial statements reflecting current income, like recent pay stubs, tax returns, or unemployment benefit statements, are also required. Provide details about household expenses and assets, as these help the servicer assess your financial situation.

Identify your mortgage servicer, which may differ from your original lender, as they manage your loan payments and offer assistance. Visit your servicer’s official website for guidance, required forms, or hardship assistance programs. Many servicers have online portals or contact numbers for payment relief. This phase ensures you have necessary information and documentation before contacting your servicer.

Navigating the Deferral Request Process

Once eligibility is assessed and documents gathered, formally request mortgage payment deferral from your servicer. Initiate contact promptly, ideally before you miss a payment, as early communication can lead to more options. Most servicers offer hardship lines, online portals, or mailing addresses for assistance requests. Clearly explain your financial situation and the nature of your hardship as part of this initial communication.

Submit your request by completing forms provided by the servicer and attaching all documentation. Ensure all information is accurate and complete to avoid processing delays. Keep copies of everything you submit for your records. Some servicers may require you to attest to your financial hardship or sign agreements related to the deferral program.

Maintain clear and consistent communication with your mortgage servicer throughout the process. Document all interactions, including dates, names of representatives, and a summary of the conversation. Ask about the servicer’s timeline for reviewing your request and when to expect a decision. The servicer will review your application and communicate their decision, which may include an offer for a deferral option tailored to your circumstances.

Managing Repayment After Deferral

Understand repayment obligations once a mortgage deferral period concludes, as deferred payments are not forgiven. A lump sum payment is one option, where all missed payments become due at the end of the deferral period. However, for many government-backed loans, servicers cannot require a lump sum payment and must offer other alternatives.

A repayment plan allows you to catch up on missed payments by adding a portion of the overdue amount to your regular monthly payments over a set period, six to twelve months. This increases your monthly payment temporarily but helps bring your loan current. This option is suitable if your financial situation improved sufficiently to manage the increased payment.

A loan modification is another avenue, especially if financial hardship indicates a longer-term need for reduced payments. This involves permanently changing loan terms, such as extending the loan term, lowering the interest rate, or adding missed payments to the principal balance. The goal of a modification is to achieve an affordable monthly payment going forward.

Some deferral programs, for government-backed loans like Fannie Mae, Freddie Mac, or FHA, allow missed payments to be added to the end of the loan term. For FHA loans, this is facilitated through a “partial claim.” Here, the Department of Housing and Urban Development (HUD) pays the missed amount to the lender, creating a non-interest-bearing subordinate lien. This lien is repaid when the property is sold, refinanced, or the primary mortgage is paid off. Understand the terms of your repayment agreement with your servicer before the deferral period ends.