Hello everyone! It's been a while!
In late October of 2022 my partner broke his back, neck, ribs, and a slew of other bones in a bike accident. He was off work for a series of months and we were able to do a forbearance with our mortgage lender for the entire time he was off (roughly 6 months). There was no negative reporting, no late payments previously, nothing. I was able to float everything else financially and we are now back to paying the mortgage, once again, no late payments.
I was reading about HELOCs & Home Equity Loans the other day and we got to talking about it. We have more than enough equity in the home to (allegedly) be approved for what we'd need (payoff some unsecured debt, do some fixes around the house, possibly replace our grocery getter that's on it's last leg but paid off so we're keeping it going as long as we can). We've run the numbers and even with a somewhat high interest rate on either, the payment would be less than what we're paying now for what we'd be paying off, allowing us to pay substantially more on the LOC or loan.
I know there are pros and cons to it all. I know that. We haven't decided yes or not yet, it's still just a thought however before we get too invested in the discussion either way, we should probably know if the forbearance will have any impact on potentially getting either?
Again, there were no late payments or anything but of course there were 6 months of no payments but being current. We currently have a (what we feel is) amazing relationship with NFCU however our mortgage is not through them, so they're an option.
Any insight into this specifically would be amazing! Thank you so much everyone!
It didn't affect me when I got my HELOC early this year, but the forbearance is relatively small, only 3 months and I made escrow payments during it. I'm also not sure it is being reported correctly, as it doesn't appear in the notes on my credit report.
The forbearance was done 2 mortgage servicing companies ago, and reporting got wierd through the transitions.
It also may have helped that my middle mortgage score was over 740.
I think your biggest hurdle will be your mortgage credit scores, which are usually significantly lower than FICO 8 scores.
Typically you need to have a middle score of at least 620, but there are exceptions.
I'll have to look into the whole mortgage score thing then. I don't recall how to figure that out, but I'll look into it to verify.
Thanks for the perspective and experience!
Typically there is a waiting period for this and was very big back in the COVID days, most lenders want to see you make 6 on-time payments after exiting a FB. It's done on all out Gov't loans (FHA,VA) and depends on lender for conventional but most are the same. Looks like you're well past that mark so you wouldn't have any issues in regards to FB
@markbeiser wrote:It didn't affect me when I got my HELOC early this year, but the forbearance is relatively small, only 3 months and I made escrow payments during it. I'm also not sure it is being reported correctly, as it doesn't appear in the notes on my credit report.
The forbearance was done 2 mortgage servicing companies ago, and reporting got wierd through the transitions.
It also may have helped that my middle mortgage score was over 740.
I think your biggest hurdle will be your mortgage credit scores, which are usually significantly lower than FICO 8 scores.
Typically you need to have a middle score of at least 620, but there are exceptions.
Notes on the credit report don't stay on there permanently, only for the time the incident is happening + a little overlap. We can tell by looking at your credit report as a FB would should "-" under payment history instead of a "1", the "-" means there was no payment made for that month and the "1" means a payment was made and on-time. We also get notes under the mortgage at times that state the home may have been affected by natural diaster (hurricanes, floods,etc) and that's to alert us there could be a problem before we start a loan file- those notes go away once it's found out it's all clear. +/- a month or 2.