Texas Mortgage Loan Forbearance Lawyer
If you are in danger of losing your home, you may want to speak with a mortgage loan forbearance lawyer Texas trusts. The idea of losing your house can be very scary. An experienced lawyer may be able to help you into forbearance.
What Is Mortgage Forbearance?
Whether due to job loss or unexpected medical bills, many people fall behind on their mortgage payments. They can no longer afford their monthly payments and may fear getting kicked out of their homes. If you are currently in this situation, you may be eligible for forbearance. Mortgage forbearance allows homeowners to remain in their homes and temporarily stop their mortgage payments until they improve their financial situation.
Benefits of Mortgage Forbearance
If you need a little extra time to get back on your feet, mortgage forbearance may be the right choice for you. Here are some of the benefits of mortgage forbearance.
- Avoid foreclosure. The most obvious benefit of mortgage forbearance is that it lets you avoid foreclosure. You may have lived in your home for a long time and do not want to let it go. Foreclosure can come with many negative effects, such as significantly lowering your credit score and making it more difficult to obtain another mortgage in the future.
- Have more time to repair your finances. Financial hardship is an inevitable part of life sometimes. If you get a mortgage forbearance approved, however, you can get some extra time to improve your financial situation. As a Texas mortgage loan forbearance lawyer can confirm, forbearance can give you several months to get you back on your feet.
- Establish lender goodwill. If you opt for forbearance instead of foreclosure, you can also show your mortgage lender good faith. If you establish goodwill, your lender may be more willing to help you with future hardships.
Downsides of Mortgage Forbearance
Although mortgage forbearance can be beneficial for some, it does come with certain downsides, like:
- Repay missed payments. Before you enter into mortgage forbearance, understand that you will be required to repay your missed payments once the forbearance comes to an end. If you do not have your financial situation under control by then, you may not be able to make these payments when they’re due.
- Harm credit rating. Although your credit score may not take as hard of a hit as it would with foreclosure, your score can still go down. If loan providers see a forbearance on your record in the future, they may deny you loans.
- Not helpful for long-term financial problems. Mortgage loan forbearance is designed to provide temporary financial relief. If you have long-term financial problems and do not know when you can realistically afford your mortgage again, forbearance might not be a suitable option.
If you are thinking about entering into mortgage loan forbearance, you should schedule a meeting with a Texas mortgage loan forbearance lawyer from Leinart Law Firm to talk about your situation.
What About My Credit?
If you’re hesitant to speak with a Texas mortgage loan forbearance lawyer because of the effects that pursuing a forbearance will have on your credit, it’s important to understand that seeking legal guidance is far more likely to result in positive effects on your credit than it will in harmful ones.
“Wait a minute,” you may be thinking. “Didn’t I just read that pursuing a forbearance will negatively affect my credit?” No, you aren’t imagining things. It is true that taking advantage of a forbearance opportunity will result in a temporary hit to your credit score and negative activity on your credit history. However, as the knowledgeable legal team at Leinart Law Firm can explain in greater detail during a risk-free consultation session, pursuing this opportunity now could prevent far greater credit-related harm down the road.
Why Forbearance Is Often a Greater Help than Harm
All too often, our Texas mortgage loan forbearance lawyer team fields calls from homeowners who are desperate to avoid foreclosure because they waited too long to act on an overdue mortgage balance. It is primarily for this reason why proactively accepting the terms of a forbearance arrangement can be much more helpful to a homeowner’s credit than harmful.
Essentially, if a homeowner’s property is foreclosed upon, their credit will be temporarily decimated. By contrast, accepting the terms of a forbearance will result in a comparatively minor dip in a homeowner’s score.
This isn’t to say that pursuing a forbearance is the best way forward for every homeowner who is struggling. If your financial trouble is very likely to resolve in the near future, this approach is a great way to avoid the risk of foreclosure while maintaining a relatively strong credit score. With that said, if your struggles will take time to resolve, filing for bankruptcy may be a superior option.
While this debt management option will also temporarily harm your credit score, it is an approach viewed by lenders as far more responsible than incurring a foreclosure. And, if filing for Chapter 13 relief will allow you to reorganize your debt and save your home all at once, its temporary credit-related consequences may be worth their trouble.
Rebuilding Your Credit After a Forbearance
If pursuing a forbearance is a good option for you but you remain concerned about how it will affect the strength of your credit score, know that it is possible to rebuild your score significantly over a short period of time. The dedicated Texas mortgage loan forbearance lawyer team at Leinart Law Firm is happy to discuss manageable credit rebuilding strategies with you at any time. Until then, here are a few tried and true options to consider:
- Pay your debts on time, every time
- Diversify the kinds of debt you owe
- Monitor your credit report and request fixes to any inaccurate information
- Keep your credit balances relatively low
- Consider engaging a co-signer who has great credit the next time you need financing
Mortgage Loan Forbearance Lawyer FAQs
How Do I Know If I’m Eligible For Mortgage Forbearance?
Determining if you’re eligible for mortgage forbearance requires speaking with your lender or Texas mortgage loan forbearance lawyer. When speaking with your lender or mortgage service provider, you want to show proof of financial hardship. An attorney can help you compile information that highlights that financial burdens you’ve dealt with, causing you to pursue mortgage forbearance. You also must comply with all the requirements set out by your lender’s forbearance stipulations. Complying with these requirements can be challenging to navigate, but a lawyer will know how to assist you with adhering to these requirements.
What Are the Main Reasons People Seek Mortgage Loan Forbearance?
As of 2023, the U.S. is still technically in the COVID-19 pandemic, although many aspects of society have returned to normal, such as businesses fully operating. However, many homeowners, organizations, and businesses are still experiencing the blowback from the pandemic. Many people lost their jobs due to the pandemic and either have had difficulty resuming work or have had their hours or pay cut. Other reasons for seeking mortgage laon forbearance can include:
- Natural disasters
- Losing a job due to non-pandemic reasons
- Property taxes going up
- Natural disasters
- Health reasons preventing a person from working
- Going through a divorce
Will I Need To Pay Extra Interest For Mortgage Forbearance?
Generally, borrowers don’t need to pay extra interest on their mortgages during loan forbearance. Usually, the loan interest stays the same, but the rate can change if your lender or service provider increases your loan interest rate or extends the loan maturity date. When working with a Texas mortgage loan forbearance lawyer, it’s vital to ask questions like:
- Will my loan maturity date be extended?
- Will the lender use catch-up methods like balloon payments?
- Will my loan forbearance be a complete deferral or will I need to pay any interest during this time?
How Long Can I Expect My Loan Forbearance To Last?
Generally, a loan forbearance lasts between three to six months. For many homeowners, this period is enough to help them get back on track. However, many homeowners need more time, which is why they can request an extension. An attorney can help you, whether you’re wanting to enter loan forbearance for the first time or are reaching need the end of your loan forbearance and want to request an extension.
Do I Need An Attorney For Mortgage Loan Forbearance?
It’s not a requirement to work with an attorney to enter a mortgage loan forbearance or to negotiate a mortgage pay reduction or loan modification. However, the entire process can be a legal nightmare for homeowners unaware of how certain procedures work. Negating pushback from your mortgage lender, filling out and submitting the correct paperwork alone can be confusing for many homeowners. Of course, many lenders may also be unwilling to modify your loan or grant a loan forbearance or they may do so, but with negative stipulations like increasing your interest in the near future. A Texas mortgage loan forbearance lawyer from Leinart Law Firm can help when you call us today!
