topic Re: Loan forbearance affect on credit in Mortgage Loans

Loan forbearance affect on credit

compassion101 — Mon, 16 Oct 2023 23:03:19 GMT

I tried to research here about this topic but didn't come up with much. Wondering anyone's experience or expertise in the effects of forbearance on your credit. I'm in a situation where I was laid off from my job 6 months ago and have not been able to find a replacement income to this day. I have some fears that it may still be many months until I land something, though I hope I'm wrong.

If I contact my mortgage company for a forbearance plan (maybe pay escrow each month), are there long term effects on my credit? Will someone look at it 18-24 months down the road and see that my loan was in forbearance and consider it a negative? Will it affect my score at that point?

Any input appreciated as I consider my options.

Re: Loan forbearance affect on credit

ShanetheMortgageMan — Mon, 16 Oct 2023 23:09:42 GMT

If your mortgage is current at the time it goes into forbearance then there shouldn't be any negative reporting. Sometimes there will be a note/comment on the trade line that the terms have been modified + if you seek mortgage financing in the future usually there will be a waiting period after the forbearance period ends before you'd be eligible for a new mortgage (anywhere from 0-12 months), but those are the only negative impacts I've seen and I haven't seen anyone's credit score get damaged from it.

Re: Loan forbearance affect on credit

Brian_Earl_Spilner — Tue, 17 Oct 2023 00:27:14 GMT

I have seen credit card lenders deny apps and increases if a different account shows as being in some sort of payment plan or deferment, but I have no idea if they would reference a mortgage noted as being in forbearance.

Re: Loan forbearance affect on credit

compassion101 — Thu, 19 Oct 2023 18:22:43 GMT

Thanks for the replies. Makes me feel better that there is not likely a long-term penalty I would face. I'll contact my lender to inquire about it.

Re: Loan forbearance affect on credit

captainsensation — Thu, 26 Oct 2023 19:57:19 GMT

I cant get a card through AMEX cause they see a loan modification on my mortgage.