YOUR VA LOAN FORBEARANCE REPAYMENT OPTIONS EXPLAINED - MORTGAGE HELP
It can happen to anyone. Even if you do the right thing, life happens, and when you’re a Veteran or surviving spouse simply trying to make ends meet, the last thing you need is dealing with a foreclosure. Fortunately, there are VA loan forbearance repayment options available to help military families.
What Are My VA Loan Forbearance Repayment Options?
If you're a Veteran or a surviving spouse struggling with mortgage payments, foreclosure isn’t your only option. There are many different VA loan forbearance repayment options available, depending on your needs.
VA loan programs offer support to help keep you in your home, with loan technicians providing free counseling, even for non-VA loans.
To speak with a VA loan technician, call 877-827-3702 or use the department’s Loan Guaranty Support portal by clicking the link.
If you’re behind, contact your loan servicer to explore repayment options and beware of possible scams from predatory companies who sadly take advantage of Vets.
Below, here are some of the key options Veterans should discuss with their loan servicer to avoid foreclosure:
Repayment Plans
Sometimes, you may miss a few payments. While not ideal, repayment plans help Vets get back on track by paying a little bit more each month so that they can catch up.
Special Forbearance
Using a special forbearance allows Veterans additional time to catch up on missed mortgage payments. However, if you go this route, be sure to speak with your loan servicer to understand how you’ll make payments after this period ends.
Loan Modification
When you miss mortgage payments, legal issues may arise, growing your financial issues even more.
Veterans who need a new beginning can work with their servicer to create a new mortgage payment schedule; however, it’s important to remember that when interest rates increase, how much you pay may also rise.
Ask for Extra Time to Privately Sell Your Home
Selling your home can take time, and while it may be a way to help you financially, depending on a number of factors, including your housing market, it may take longer than expected.
Veterans can delay foreclosures by asking for more time to sell, making this a great forbearance option if your VA loan is causing financial hardship.
Short Sale
If your home is worth less than you owe, your servicer may allow a short sale, accepting the sale proceeds as full payment. However, this could reduce or impact your future home loan benefits.
Still, a short sale is a viable option depending on your needs, best discussed with your VA loan technician. You can reach them by calling 877-827-3702 to learn more.
Sign Over Your Deed
Another VA loan forbearance option is to sign over your home’s deed to your loan servicer. This option may also reduce or forfeit future home loan benefits, so be sure to speak to your VA loan technician beforehand.
Veterans Affairs Servicing Purchase (VASP) Program
Once you’ve exhausted all of your VA home loan forbearance options, Veterans with a VA-guaranteed loan may be able to enter the VASP program.
This allows the VA to purchase a modified version of your loan. To learn more, read our guide on the VASP program by clicking the link.
CARES Act
The Coronavirus Aid, Relief, and Economic Security (CARES) Act came to be in 2020 after several Americans struggled to cover their mortgage payments because of COVID-19.
While you may be able to use this stimulus bill, seeing as its funding expired on September 30, 2021, it’s unlikely.
While the CARES Act played an important role in helping Veterans stay afloat during the pandemic, working with your VA Regional Loan Center will likely yield better results these days.
Can You Refinance a VA Loan in Forbearance?
Even if you’re receiving mortgage forbearance for your VA loan, you can refinance the terms of your agreement.
Remember, loan modification is a great way for some Veterans who might otherwise be forced to foreclose on their homes.
Hopefully, you never need any of the VA loan forbearance repayment options available; however, it’s great to know that there are paths forward for heroes who need a little help.
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