Forbearance and Deferment. Pause or Reduce Payments While You Recover

A complete guide to temporarily reducing or pausing mortgage payments. Forbearance gives you breathing room when facing a temporary financial hardship.

What You Need to Know

Forbearance is a temporary pause or reduction in your mortgage payment. Instead of losing your home, you negotiate with your lender to reduce or skip payments for a set period (typically 3-12 months) while you get back on your feet financially.

Key point: This is temporary. Forbearance gives you time to recover from a temporary hardship like job loss, medical emergency, or unexpected expense. When forbearance ends, you resume normal payments or work out a longer-term solution.

Understanding Forbearance vs Other Options

Forbearance

  • •Temporarily pause payments
  • •3-12 months typically
  • •Payments resume after
  • •Quick approval (1-2 weeks)
  • •Temporary solution

Modification

  • •Permanent change to loan
  • •Lower payments long-term
  • •Longer term (extend loan)
  • •Takes 4-6 months
  • •Permanent solution

Refinancing

  • •New loan entirely
  • •Lower interest rate
  • •Requires credit approval
  • •Takes 5-6 weeks
  • •Permanent solution

Who This Works Best For

You Are a Good Fit If:

  • ✓Your hardship is temporary (job loss you expect to recover from, medical emergency you will overcome)
  • ✓You expect your financial situation to improve in 3-12 months
  • ✓You have specific plans to resume payments (new job starting, settlement expected, etc.)
  • ✓You want a quick solution (need relief in next few weeks)
  • ✓You do not want a permanent modification to your loan

May Not Work If:

  • ✗Your financial problem is long-term or permanent
  • ✗You cannot afford payments even after forbearance ends
  • ✗You have no realistic plan to recover
  • ✗Forbearance only delays the inevitable

Real Homeowner Scenario

Patricia M., Newark was steadily employed as a nurse making $3,500 per month with a $1,100 mortgage payment. In November, she was involved in a car accident and required emergency surgery. She missed 3 months of work for recovery and fell behind $3,300 on her mortgage.

She contacted her lender and requested forbearance, explaining that she expected to return to full-time work in January. Her lender approved a 3-month forbearance agreement:

  • December, January, February: Zero payment required
  • March: Resume normal $1,100 payment
  • Missed $3,300 added to end of loan (capitalized)

Patricia returned to work in January as planned. She resumed her normal payment in March. No foreclosure occurred. The forbearance gave her exactly what she needed: time to recover.

Types of Forbearance Arrangements

Option 1: Full Forbearance (Zero Payment)

You pay nothing for 3-6 months. This is the most common option for temporary hardships. After forbearance ends, you resume your normal payment.

Example: Monthly payment $1,200

Forbearance period: Nov, Dec, Jan (3 months) = $3,600 skipped payments

February onward: Resume $1,200 monthly payment

Capitalization: $3,600 added to loan balance

Option 2: Partial Forbearance (Reduced Payment)

You pay a reduced amount (50% of normal payment) for 3-6 months. This bridges the gap if you have partial income.

Example: Normal monthly payment $1,200

Forbearance payment: $600/month for 6 months

After 6 months: Resume full $1,200 payment

Capitalization: $3,600 in forgone payments added to loan

Option 3: Graduated Forbearance (Increasing Payments)

Payments start low and increase gradually as your financial situation improves.

Example: Normal payment $1,200

Month 1-2: $400/month

Month 3-4: $700/month

Month 5-6: $1,000/month

Month 7+: Full $1,200/month resumes

The Forbearance Process: Step by Step

1

Contact Your Lender

Call your lender as soon as you realize you will miss a payment. Ask for the loss mitigation or workout department. Be direct: "I need help with my mortgage payment due to a temporary hardship. Can we discuss forbearance?"

2

Explain Your Hardship

Be specific and brief. Example: "I was laid off on March 15. I have a job starting June 1." Or: "I had medical emergency, out of work for 2 months, returning to work in April." The key is demonstrating this is temporary.

3

Request Specific Forbearance Terms

Be clear about what you need: "I need 3 months with no payment. April, May, and June." Or: "I can pay $500/month for 2 months instead of the full $1,200." Specific requests are easier to approve.

4

Receive Forbearance Agreement

Lender sends a Forbearance Agreement in writing. This spells out exactly: how many months, payment amount (if any), when forbearance ends, what happens to missed payments, and when normal payments resume.

5

Review and Sign

Carefully read the agreement. Make sure it matches what you discussed. Do not sign if the terms are different. Call back to clarify anything you do not understand before signing.

6

Make Reduced or Zero Payments

During forbearance period, either pay nothing or pay the reduced amount as agreed. Make payments on time. Missing even one payment during forbearance can result in denial or cancellation.

7

Resume Normal Payments

When forbearance ends, resume your normal full payment. Missed payments have been capitalized (added to loan balance). You do not pay them as a lump sum.

Timeline: Fast Process

Day 1: Initial Contact

Same day

Call lender, speak to loss mitigation, request forbearance

Days 2-3: Application and Review

1-3 days

Lender may request brief explanation of hardship

Days 4-7: Approval and Documentation

3-7 days

Lender approves and sends Forbearance Agreement

Total Time to Relief

1-2 weeks

From first call to payment pause: typically 1-2 weeks

Fastest Solution: Forbearance is the fastest way to stop foreclosure. Approval typically takes 1-2 weeks, compared to 4-6 months for modification or 5-6 weeks for refinancing.

What Happens to Your Missed Payments?

This is critical to understand. You do NOT pay off the missed payments immediately after forbearance. Instead, they are handled one of three ways:

Option 1: Capitalization (Most Common)

Missed payments are added to the end of your loan. Your loan balance increases by the skipped amount. You pay this back as part of your normal mortgage over the remaining loan term.

Example: Skipped 3 months of $1,200 payments = $3,600 added to loan balance. You repay this spread over 20-30 years along with your regular payment.

Option 2: Repayment Plan

Missed payments are added to your regular payment over a period. Example: Normal payment is $1,200. After forbearance, you pay $1,200 + $400 for 9 months to catch up.

Advantage: Missed payments are paid off faster than capitalization

Disadvantage: Higher payment during repayment period

Option 3: Lump Sum After Forbearance

Less common. You pay all missed payments at the end of forbearance period in one lump sum. This is difficult for homeowners in financial hardship.

Critical Point

Forbearance does not erase your missed payments. It simply postpones dealing with them. Before you accept forbearance, make sure you have a realistic plan for what comes after. If forbearance ends and you still cannot afford your normal payment (plus the repayment of skipped payments), you will be back in foreclosure.

Benefits vs. Risks

Benefits

  • +Fastest approval (1-2 weeks)
  • +Immediate relief from payments
  • +No credit score requirement
  • +Easy process (no complex documents)
  • +Stops foreclosure immediately
  • +You keep your home

Risks & Challenges

  • -Only temporary (3-12 months)
  • -Problem returns when forbearance ends
  • -Missed payments still owed (capitalized or repaid)
  • -May need permanent solution after forbearance ends
  • -Not suitable for long-term financial problems

Critical: Plan for When Forbearance Ends

This is the most important section. Forbearance is only successful if your situation actually improves by the time it ends. Before you accept forbearance, honestly answer these questions:

Question 1: When will my income return?

Be specific. If you were laid off, do you have a new job lined up? If so, when does it start?

Question 2: After forbearance, can I afford my normal payment?

Do the math. When forbearance ends in month 4, will your income be back to a level where you can afford the full payment plus any repayment of skipped payments?

Question 3: What if my situation does not improve?

Have a backup plan. You might need loan modification or to explore other options. Do not wait until forbearance ends with no plan.

Warning

If you accept forbearance but your financial situation will NOT improve, you are only delaying foreclosure. The problem will return when forbearance ends. In that case, consider a permanent solution like loan modification instead.

Your Next Steps

If forbearance seems like your best option:

1.Call your lender TODAY. Do not wait for a foreclosure notice. Forbearance is easier to get if you call before missing payments.
2.Be specific about your hardship and your timeline for recovery. "I was laid off, job starts June 1" is better than "I am having financial problems."
3.Request specific forbearance terms: how many months, what payment (if any), and how missed payments will be handled.
4.Read the Forbearance Agreement carefully before signing. Make sure it matches what was agreed.
5.Make all forbearance payments on time. If you miss even one payment, forbearance may be cancelled.
6.Start planning NOW for what comes after forbearance. What will you do when it ends?

Not sure if forbearance is right for you?

Take the Situation Quiz to Compare All Options →

About This Guide

This guide is based on standard forbearance practices used by US mortgage lenders as of 2026. Specific terms vary by lender. This information is educational and does not constitute legal or financial advice. For guidance specific to your situation, contact your lender directly or consult with a HUD-approved housing counselor (free service).