Can you refinance a home loan currently in Forbearance?

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
LoanSafe Members!
This one has been a hot topic recently as many homeowners are receiving a full or partial forbearance on their mortgage due to the current nature of Covid-19. I have had a few people reach out to me and want to refinance to take advantage of the historically low interest rates while in forbearance. Please read below in regards to what you will need to do to qualify.

Do you qualify for a refinance while in forbearance? Short answer, NO.

What do I need to do in order to qualify?
  • Option 1: You will need to take the loan out of forbearance and pay all the back payments in a lump sum to bring it current to proceed.
  • Option 2: Once the loan is out of forbearance, the borrower must complete 3 monthly payments on time. Once those have been made on the 4th month we can proceed.
  • Option 3: If your loan is modified once the forbearance period ends, we can refinance immediately. In this case you may have to complete three trial payments before the permanent modification is granted. The terms of the modification given will help you know whether or not a refinance in the future will benefit.

In most cases, I have seen borrowers take Option 2 as it is the path of least resistance.

If you have any questions about this, or questions in general about forbearance and what it means please give me a call here: 619-379-8999. My direct e-mail is also [email protected]