How Many Times Can You Defer a Mortgage Payment?

Mortgage payment deferment and forbearance offer homeowners temporary relief during financial hardship. These options allow you to pause or reduce mortgage payments, helping you regain financial stability and avoid foreclosure. Understanding the distinctions and processes is important for managing your mortgage when income is disrupted.

What Mortgage Deferment and Forbearance Mean

Mortgage forbearance is an agreement between a homeowner and their mortgage servicer that allows for a temporary pause or reduction in monthly mortgage payments. This relief is offered during short-term financial challenges, such as job loss, unexpected medical costs, or natural disasters. During a forbearance period, payments are not forgiven; the homeowner still owes the full amount.

A mortgage deferment, while often used interchangeably with forbearance, functions differently in how missed payments are handled. With a deferment, payments are moved to the end of the loan term. This extends the loan maturity date by the number of months deferred, and missed payments become due at the very end of the mortgage or upon sale or refinancing of the property. Forbearance generally requires a plan to repay the missed amounts, while deferment automatically shifts them to the end of the loan, often without additional interest accruing on the deferred amount itself.

Maximum Periods and Extensions for Deferment

The duration of mortgage deferment or forbearance periods varies depending on the loan type and servicer policies. An initial forbearance period might range from three to six months, with possibilities for extension based on continued financial hardship. Some agreements can extend up to a year, with servicer approval.

For conventional loans backed by Fannie Mae or Freddie Mac, initial forbearance periods often allow for up to six months, with potential extensions. These extensions require the homeowner to request them and demonstrate ongoing financial difficulty.

Government-backed loans (FHA, VA, USDA) also offer similar forbearance periods. These loans typically provide an initial six-month forbearance, extendable upon request. Additional extensions may be available for eligible borrowers.

While extensions are possible, limits exist on the total cumulative period a loan can remain in a deferred status. A homeowner may need to wait for a specific period, such as a year, before being eligible for another deferral. There may also be a lifetime limit on the aggregate number of months that can be deferred on a single loan. The exact number of times or total length of deferment depends on the loan type, servicer policies, and any current government relief programs.

Preparing for and Requesting Deferment

Before contacting a mortgage servicer to request deferment or forbearance, homeowners should gather financial documentation. This preparation helps in clearly articulating the financial hardship. Necessary documents may include recent pay stubs, bank statements, and any records demonstrating a decrease in income or an increase in expenses, such as medical bills or unemployment benefit statements.

Homeowners should also have their mortgage account details, including their loan number and the servicer’s contact information. Assess your current financial situation to understand how long temporary relief might be needed and your ability to resume payments in the future. This helps in discussing appropriate options with the servicer.

Understanding the reason for the financial hardship is important. Whether it stems from job loss, reduced hours, illness, or other unexpected events, explaining the situation clearly and concisely is beneficial. This streamlines the conversation with the servicer and helps them identify suitable hardship options.

Navigating the Deferment Process and Post-Deferment Options

Initiating a request for mortgage deferment or forbearance involves contacting the mortgage servicer directly. Homeowners can often reach their servicer by phone, through their website, or via email. When speaking with a representative, clearly explain the financial hardship and state the request for payment assistance. The servicer will then outline available options based on the loan type and individual circumstances.

Once a deferment or forbearance period concludes, homeowners must address the missed payments. Several options are available to repay the deferred amounts. One option is a lump-sum payment, also known as reinstatement, where all missed payments are paid back at once. However, for many government-backed loans, servicers cannot require a lump-sum repayment and must offer other alternatives.

Another option is a repayment plan, which involves adding a portion of the missed payments to regular monthly mortgage payments over a set period, often between six to twelve months, until the past-due amount is covered. A payment deferral, distinct from forbearance, permanently moves the missed payments to the end of the loan term, extending the maturity date. This option means the homeowner resumes regular payments, and the deferred amount becomes due when the loan is paid off, refinanced, or the property is sold.

For homeowners whose financial situation has not improved sufficiently to resume regular payments, a loan modification may be an option. This is a permanent change to the original mortgage terms, which could involve adjusting the interest rate, extending the loan term, or adding the missed payments to the principal balance to make monthly payments more affordable. Each post-deferment option has different implications for the total amount paid over the life of the loan and the monthly payment amount, making it important to discuss these thoroughly with the servicer.