ORLANDO, Fla. — Homeowners can now “pause” their mortgage if they need to.
As part of the stimulus package, passed last Friday, lenders have been told to offer what’s known as “forbearance.”
Across the state, 65% of Floridians own a home, and with unemployment soaring, many Central Floridians are wondering how they will pay their mortgage.
Part of the stimulus package passed last month directs lenders to offer a 180 day forbearance to homeowners.
But, there’s a catch.
“This is not a forgiveness, this is not a freebee,” said Jennifer Micklos, with Movement Mortgage out of Clermont.
Micklos notes that the forbearance is like a pause, homeowners will still owe the money to the bank, as well as others.
“They are still going to be paying interest on the balance of their loan, there are taxes and insurance that are not into escrow, that will have to be paid out,” Micklos said.
The bill will come due at the end of the 180 days.
Some banks may be willing to spread missed payments out over time, while others may expect all the missed months to be paid in full, at once.
“Those payments that are due at the end of the forbearance, if you can’t pay them back, they don’t just automatically go on the end,” said Kimberly Keith, with ALCOVA Mortgage.
Keith cautions against taking any pause until talking to a lender to discuss exactly what will be required after the 180 days.
“People absolutely need to be aware of what is expected of them and what is going to happen,” Keith said.
Most mortgages are federally backed and required to offer the 180 days
However, if someone’s loan is private, the loan service has more control, and while most are offering 90 days, the same rules apply.
They will still owe the money, and may have to pay it all back at once.
Cox Media Group