During these uncertain times, there are many options available for homeowners when it comes to their home mortgage loan, specifically mortgage forbearance. The team at Indigo Mortgage is here to help educate you about mortgage forbearance and to help you decide if it is right for you.

Right now, many large mortgage companies are offering forbearance to their borrowers due to the impacts of COVID-19, specifically in New Mexico. Forbearance is when your mortgage servicer or lender allows you to pause or reduce your payments for a limited period of time. Forbearance does not erase what you owe. These mortgage companies and lenders are offering 3 months of skipped mortgage payments and stating they will not report to the credit bureaus. We want borrowers to be aware that they may not report the payments as missed or late, but they do in fact report the forbearance to the credit bureaus. If you decide to refinance, the new lender will pull credit. On the credit bureau information, it will say “in forbearance”. The lender will then most likely deny the mortgage loan unless the borrower never actually missed a payment.

Before moving forward with anything, we suggest considering the following rules set by all lenders. Any borrower who is in or has recently completed a forbearance is only eligible for a new home mortgage if they never missed a payment, or if they have made 3 payments since the forbearance was completed. At Indigo Mortgage, we have seen several borrowers who entered home loan forbearance that were denied or put on hold because they had missed a few payments. It is always important to know all of the facts when it comes to revising any type of home mortgage loan.

If you are in New Mexico and are considering a loan refinance or a home purchase, we advise borrowers not to take advantage of a mortgage forbearance unless it’s absolutely necessary. For more information or to start your refinance, reach out to the experts at Indigo Mortgage! We are here to help.