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What Is The Difference Between A Forbearance And A Deferment? | Mortgage Forbearance Vs Deferment - YouTube
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so what is the difference between
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Mortgage forbearance and mortgage
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deferment okay very big difference that
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we need to talk about in today's
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training hey everyone it's Mike Adams
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and on this channel we empower
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individuals to achieve freedom through
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improved financial literacy and business
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ownership if you are new to the channel
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make sure to click subscribe and click
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the bell so that way you get notified on
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any and all of our future content so in
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this video guys we're going to be
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discussing the difference between
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Mortgage forbearance and mortgage
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deferment okay because there is a big
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time difference and you know what's
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being talked about you know it's all
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over the news it's all over the internet
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it's mortgage forbearance see what's
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available you know if you've been
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affected by this crisis you can get you
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some forbearance okay you know and the
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bottom line is you know you know is this
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a good thing
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and you know for some people in some
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scenarios a mortgage forbearance can be
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a really good thing but I want to really
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define the two because many many
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individuals have been kind of
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intertwining the two like they mean the
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same thing but they don't okay because I
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think what most people really want is
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the deferment for what they're getting
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is the forbearance okay and so let's
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define the two what a mortgage
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forbearance is is where the bank is
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basically giving you time off or hitting
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and kind of pause on you making your
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payment's right and so what they'll do
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is they'll give you a typically what
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we're seeing is about three months of
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mortgage forbearance where you can go
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three months without making your payment
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okay but the big biggest hurdle okay the
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biggest issue with forbearance is that
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once a month four comes around you have
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to again start making your payment's but
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the three payments that you were allowed
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to miss all three of these are now all
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owed at the same time that you're you
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know starting to make your payment's
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again so
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essentially in that scenario you'd have
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to come up with four months worth of
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payments in one big lump sum once the
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forbearance period ends
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okay so again you don't have to make
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your payment's when you're in
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forbearance but again you're gonna have
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to come up with a lump sum to get all
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caught up once the forbearance period is
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over now with a deferment okay and how
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are the two different a deferment is is
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really what most people want right is
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that they really want a deferment what
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that means is that again let's say
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you're getting that three months of
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deferment so they're gonna let you not
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make your payment for the next you know
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three months okay and then you're gonna
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have to start making your mortgage
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payments again after the deferment
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period is over but what's really nice
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about a deferment compared to a
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forbearance is that when you start
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resuming your payment's again you don't
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have to catch up those three months all
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at that same point right you don't have
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to come up with a lump sum with the
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deferment they're gonna take these three
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payments and stick them on the end of
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your loan okay so you're making your
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loan longer right by three months
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because you're taking the three payments
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that you're gonna miss and you're
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sticking them on the end of the loan but
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again you don't have to come up with
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that lump sum payment okay and that's
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really the big difference there again
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with forbearance yeah I mean both of
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them you're both of them give you a
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pause on payments both of them give you
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time in which you don't have to make
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payments on your mortgage and the bank
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is agreeing not to foreclose on you you
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know not that not to move down that road
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because they are giving you that time
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but again with a forbearance you will be
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required to come up with a lump sum
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payment once your forbearance period
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ends okay and the amount that lump sum
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is the amount of months you are allowed
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to miss during your forbearance period
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and again with a deferment any payments
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that are missed
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they are politely stuck on the end of
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your loan
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again just elongating the length of your
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loan by the months that were deferred
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and so as you can see you guys that's a
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big big difference and one of the
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concerns are that
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talking about in other videos on this
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channel with these mortgage forbearances
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is that most people aren't you know I
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hate to say not aware because it sits
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right on the website your it's right in
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the paperwork or if you call them to get
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your forbearance they probably told you
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over the phone hey you know once the
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forbearance period is over right you're
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gonna have to get caught up with that
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lump sum but most people again again
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when times are tough I mean you got to
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do what you got to do most people aren't
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really thinking about you know four
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months or now I'm gonna have to deal
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with this okay or maybe they're thinking
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about it but it's an afterthought
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compared to what's going on right now
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and if you're unable to make those
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mortgage payments and you need to take
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forbearance you know you got to do it
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okay but just understand how it actually
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works and that you will be required to
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come up with a lump sum you know to get
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all caught up now with what's going on
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with the crisis you know the banks are
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talking about after your forbearance
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period if you can't want the lump sum
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payment at that point you'll have a
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chance to again negotiate with the banks
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but again the big problem for me is that
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you'll be at a position of disadvantage
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because again you've already gotten a
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forbearance you weren't able to come
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with the lump sum and again the bank is
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gonna make a new determination on
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whether or not they're either either a
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maybe they'll give you the deferment and
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take the that amount owed and stick it
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on the end
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yeah maybe they'll do that maybe they'll
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give you more forbearance time maybe
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they'll give you another three months
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and then reevaluate it again but again
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now you'd have to have six months you
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know or seven months excuse me all at
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once if they gave you additional
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forbearance time so more forbearance
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time just means a larger lump sum is
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going to be owed at the end of the
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forbearance okay so and what we're
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really looking for when it comes to
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getting help with your mortgage payments
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is the deferment you know so if possible
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and if you're able to get someone on the
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phone and negotiate for a deferment for
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most people that's gonna be much better
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than just getting the forbearance and
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having to deal with that lump sum
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especially coming out of this you know
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crisis that we've been going through you
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know some people you know you
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say some people don't know for sure if
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their incomes gonna go back right to
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what it was prior to this crisis
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some people have racked up some
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additional debt you know during this
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crisis and maybe aren't gonna be able to
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save up you know all those payments I
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even if you were able to get back into
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work right now you know would you be
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caught up to where you'd be able to save
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up you know those three months of
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payments and so the lump sum is I think
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going to trip a lot of people up so
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again I encourage you you know if you're
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able to avoid all of this you know just
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continue to make that mortgage payment
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you know in my opinion you know the the
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payment that you made to put the roof
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over your head is the most important
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bill that you pay every single month and
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it's not one to really mess with
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especially when you're talking about a
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mortgage especially if you have a lot of
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equity in your property right now you
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know you just can't count on the banks
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you know being overly friendly if you're
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not able to come up with that lump sum
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okay you can't count on that I mean
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again maybe the government does
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something that says hey can't foreclose
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yet right but once the banks get their
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chance to do so okay and you're not able
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to come up with that lump sum I think
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that's certainly gonna trip a lot of
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people up so you really need to be
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careful with these forbearances knowing
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that there will be a lump sum at the end
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of the forbearance period and if you're
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at all able to go for the deferment
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where they're taking any of the payments
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that you missed and they're sticking
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them on the end of the loan to where you
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don't have to come up with that lump sum
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so hopefully you guys found value in
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this training and in this definition and
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really just showing the difference
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between Morgan you know getting a
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forbearance and getting a deferment
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on your loan again there's a big time
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difference one of them forbearances ends
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up with you paying a lump sum at the end
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of the forbearance period with a
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deferment they're taking those same
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missed payments and sticking them on the
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end of the loan which again for most
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people is the ideal scenario if you got
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some value out of this training make
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sure to give this video a like it
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definitely helps us with the YouTube
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algorithm to get this message out to
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more people and I definitely jump into
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the conversation leave us a comment
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below if you have any questions or
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concerns regarding this
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video have a great day everybody we'll
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see you in the next training
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you
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